Investors interested in Transportation - Equipment and Leasing stocks are likely familiar with 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Greenbrier Companies and Westinghouse Air Brake Technologies are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, 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 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.
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 8.55, while WAB has a forward P/E of 15.97. We also note that GBX has a PEG ratio of 0.90. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. WAB currently has a PEG ratio of 1.28.
Another notable valuation metric for GBX is its P/B ratio of 0.67. 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 1.27.
Based on these metrics and many more, GBX holds a Value grade of A, while WAB has a Value grade of C.
GBX stands above WAB thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GBX is the superior value 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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