ARCB or JBHT: Which Is the Better Value Stock Right Now?
Investors with an interest in Transportation - Truck stocks have likely encountered both ArcBest (ARCB) and JB Hunt (JBHT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
ArcBest has a Zacks Rank of #2 (Buy), while JB Hunt has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ARCB likely has seen a stronger improvement to its earnings outlook than JBHT has recently. But this is just one piece of the puzzle for value investors.
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 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.
ARCB currently has a forward P/E ratio of 29.32, while JBHT has a forward P/E of 39.22. We also note that ARCB has a PEG ratio of 0.84. 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. JBHT currently has a PEG ratio of 2.12.
Another notable valuation metric for ARCB is its P/B ratio of 2.68. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, JBHT has a P/B of 7.48.
These are just a few of the metrics contributing to ARCB's Value grade of B and JBHT's Value grade of D.
ARCB 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 ARCB is likely the superior value option right now.
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See Stocks Now >>ArcBest Corporation (ARCB) : Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
