Investors interested in Transportation - Shipping stocks are likely familiar with Teekay Tankers (TNK - Free Report) and Kirby (KEX - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Teekay Tankers has a Zacks Rank of #1 (Strong Buy), while Kirby has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TNK has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
TNK currently has a forward P/E ratio of 3.23, while KEX has a forward P/E of 23.92. We also note that TNK has a PEG ratio of 1.08. 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. KEX currently has a PEG ratio of 2.38.
Another notable valuation metric for TNK is its P/B ratio of 0.66. 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, KEX has a P/B of 1.49.
These are just a few of the metrics contributing to TNK's Value grade of B and KEX's Value grade of C.
TNK stands above KEX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TNK is the superior value option right now.