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Westinghouse Air Brake Technologies Corporation (WAB) - free report >>
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Westinghouse Air Brake Technologies Corporation (WAB) - free report >>
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GATX or WAB: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Transportation - Equipment and Leasing sector might want to consider either Gatx (GATX - Free Report) or Westinghouse Air Brake Technologies (WAB - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Gatx has a Zacks Rank of #1 (Strong Buy), while Westinghouse Air Brake Technologies has a Zacks Rank of #4 (Sell) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GATX is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GATX currently has a forward P/E ratio of 14.73, while WAB has a forward P/E of 16.99. We also note that GATX has a PEG ratio of 0.98. 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. WAB currently has a PEG ratio of 1.55.
Another notable valuation metric for GATX is its P/B ratio of 1.51. 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, WAB has a P/B of 1.52.
These are just a few of the metrics contributing to GATX's Value grade of B and WAB's Value grade of D.
GATX sticks out from WAB in both our Zacks Rank and Style Scores models, so value investors will likely feel that GATX is the better option right now.