Investors interested in Transportation - Services stocks are likely familiar with ZTO Express (Cayman) Inc. (ZTO) and Grupo Aeroportuario del Centro Norte (OMAB). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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.
ZTO Express (Cayman) Inc. has a Zacks Rank of #2 (Buy), while Grupo Aeroportuario del Centro Norte has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that ZTO has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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.
ZTO currently has a forward P/E ratio of 17.78, while OMAB has a forward P/E of 20.08. We also note that ZTO has a PEG ratio of 0.88. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. OMAB currently has a PEG ratio of 6.69.
Another notable valuation metric for ZTO is its P/B ratio of 2.05. 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, OMAB has a P/B of 9.13.
These are just a few of the metrics contributing to ZTO's Value grade of B and OMAB's Value grade of F.
ZTO stands above OMAB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ZTO is the superior value option right now.
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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.
