Investors interested in Transportation - Shipping stocks are likely familiar with ZIM Integrated Shipping Services (ZIM) and Kirby (KEX). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
ZIM Integrated Shipping Services and Kirby are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ZIM likely has seen a stronger improvement to its earnings outlook than KEX 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 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.
ZIM currently has a forward P/E ratio of 2.16, while KEX has a forward P/E of 23.50. We also note that ZIM has a PEG ratio of 0.05. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. KEX currently has a PEG ratio of 0.76.
Another notable valuation metric for ZIM is its P/B ratio of 1.09. 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, KEX has a P/B of 2.24.
Based on these metrics and many more, ZIM holds a Value grade of A, while KEX has a Value grade of C.
ZIM has seen stronger estimate revision activity and sports more attractive valuation metrics than KEX, so it seems like value investors will conclude that ZIM is the superior option right now.
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Kirby Corporation (KEX) : Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
