Investors interested in stocks from the Transportation - Equipment and Leasing sector have probably already heard of Greenbrier Companies (GBX) and Westinghouse Air Brake Technologies (WAB). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Greenbrier Companies has a Zacks Rank of #2 (Buy), while Westinghouse Air Brake Technologies has a Zacks Rank of #4 (Sell) right now. This means that GBX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.
GBX currently has a forward P/E ratio of 12.02, while WAB has a forward P/E of 21.93. We also note that GBX has a PEG ratio of 1.26. 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. WAB currently has a PEG ratio of 1.91.
Another notable valuation metric for GBX is its P/B ratio of 1.18. 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, WAB has a P/B of 2.81.
These are just a few of the metrics contributing to GBX's Value grade of A and WAB's Value grade of D.
GBX has seen stronger estimate revision activity and sports more attractive valuation metrics than WAB, so it seems like value investors will conclude that GBX is the superior option right now.
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Greenbrier Companies, Inc. (The) (GBX) : Free Stock Analysis Report
Westinghouse Air Brake Technologies Corporation (WAB) : Free Stock Analysis Report
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