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CPA vs. BBAVY: Which Stock Is the Better Value Option?

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Investors interested in Transportation - Airline stocks are likely familiar with Copa Holdings (CPA - Free Report) and BBA AVIATION . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Copa Holdings is sporting a Zacks Rank of #1 (Strong Buy), while BBA AVIATION has a Zacks Rank of #5 (Strong Sell). This means that CPA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

CPA currently has a forward P/E ratio of 11.59, while BBAVY has a forward P/E of 19.14. We also note that CPA has a PEG ratio of 0.73. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. BBAVY currently has a PEG ratio of 2.13.

Another notable valuation metric for CPA is its P/B ratio of 2.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BBAVY has a P/B of 2.09.

These metrics, and several others, help CPA earn a Value grade of B, while BBAVY has been given a Value grade of D.

CPA sticks out from BBAVY in both our Zacks Rank and Style Scores models, so value investors will likely feel that CPA is the better option right now.


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