ICAGY or ULCC: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Transportation - Airline sector might want to consider either International Consolidated Airlines Group SA (ICAGY) or Frontier Group Holdings (ULCC). 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
International Consolidated Airlines Group SA and Frontier Group Holdings are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that ICAGY likely has seen a stronger improvement to its earnings outlook than ULCC has recently. But this is only part of the picture 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.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
ICAGY currently has a forward P/E ratio of 4.04, while ULCC has a forward P/E of 29.14. We also note that ICAGY has a PEG ratio of 0.09. 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. ULCC currently has a PEG ratio of 0.52.
Another notable valuation metric for ICAGY is its P/B ratio of 1.58. 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, ULCC has a P/B of 2.99.
Based on these metrics and many more, ICAGY holds a Value grade of B, while ULCC has a Value grade of D.
ICAGY sticks out from ULCC in both our Zacks Rank and Style Scores models, so value investors will likely feel that ICAGY is the better option right now.
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International Consolidated Airlines Group SA (ICAGY) : Free Stock Analysis Report
Frontier Group Holdings, Inc. (ULCC) : Free Stock Analysis Report
