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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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TRTN vs. WAB: Which Stock Is the Better Value Option?
Investors with an interest in Transportation - Equipment and Leasing stocks have likely encountered both Triton International and 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Triton International has a Zacks Rank of #2 (Buy), while Westinghouse Air Brake Technologies has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that TRTN likely has seen a stronger improvement to its earnings outlook than WAB has recently. 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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
TRTN currently has a forward P/E ratio of 6.34, while WAB has a forward P/E of 12.51. We also note that TRTN has a PEG ratio of 0.63. 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 1.43.
Another notable valuation metric for TRTN is its P/B ratio of 0.98. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, WAB has a P/B of 1.
These are just a few of the metrics contributing to TRTN's Value grade of A and WAB's Value grade of C.
TRTN is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TRTN is likely the superior value option right now.