Back to top

Image: Bigstock

GATX or NCTKF: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors with an interest in Transportation - Equipment and Leasing stocks have likely encountered both Gatx (GATX - Free Report) and NABTESCO CP TKY (NCTKF - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Gatx has a Zacks Rank of #2 (Buy), while NABTESCO CP TKY has a Zacks Rank of #5 (Strong Sell). This means that GATX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

GATX currently has a forward P/E ratio of 15.85, while NCTKF has a forward P/E of 26.82. We also note that GATX has a PEG ratio of 1.06. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. NCTKF currently has a PEG ratio of 1.73.

Another notable valuation metric for GATX is its P/B ratio of 1.62. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NCTKF has a P/B of 2.10.

These metrics, and several others, help GATX earn a Value grade of A, while NCTKF has been given a Value grade of C.

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


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


GATX Corporation (GATX) - free report >>

Nabtesco (NCTKF) - free report >>

Published in