Investors with an interest in Transportation - Services stocks have likely encountered both Matson (MATX) and Grupo Aeroportuario del Centro Norte (OMAB). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Matson has a Zacks Rank of #1 (Strong Buy), while Grupo Aeroportuario del Centro Norte has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that MATX likely has seen a stronger improvement to its earnings outlook than OMAB 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.
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.
MATX currently has a forward P/E ratio of 15.70, while OMAB has a forward P/E of 19.49. We also note that MATX has a PEG ratio of 3.14. 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. OMAB currently has a PEG ratio of 6.50.
Another notable valuation metric for MATX is its P/B ratio of 2.24. 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, OMAB has a P/B of 6.38.
These are just a few of the metrics contributing to MATX's Value grade of A and OMAB's Value grade of D.
MATX sticks out from OMAB in both our Zacks Rank and Style Scores models, so value investors will likely feel that MATX is the better option right now.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.