Investors looking for stocks in the Transportation - Services sector might want to consider either DHL Group Sponsored ADR (DHLGY) or Expeditors International (EXPD). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
DHL Group Sponsored ADR and Expeditors International are both sporting a Zacks Rank of #2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is only part of the picture 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.
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.
DHLGY currently has a forward P/E ratio of 14.82, while EXPD has a forward P/E of 26.40. We also note that DHLGY has a PEG ratio of 1.89. 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. EXPD currently has a PEG ratio of 3.12.
Another notable valuation metric for DHLGY is its P/B ratio of 2.64. 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, EXPD has a P/B of 9.4.
These are just a few of the metrics contributing to DHLGY's Value grade of A and EXPD's Value grade of D.
Both DHLGY and EXPD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DHLGY is the superior value option right now.
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Expeditors International of Washington, Inc. (EXPD) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
