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JBHT vs. ODFL: Which Stock Is the Better Value Option?

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Zacks Equity Research
·2 min read
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Investors interested in stocks from the Transportation - Truck sector have probably already heard of JB Hunt (JBHT) and Old Dominion Freight Line (ODFL). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 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.

JB Hunt and Old Dominion Freight Line are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that JBHT is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

JBHT currently has a forward P/E ratio of 27.23, while ODFL has a forward P/E of 34.56. We also note that JBHT has a PEG ratio of 1.82. 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. ODFL currently has a PEG ratio of 3.65.

Another notable valuation metric for JBHT is its P/B ratio of 5.69. 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, ODFL has a P/B of 7.15.

These metrics, and several others, help JBHT earn a Value grade of B, while ODFL has been given a Value grade of C.

JBHT stands above ODFL thanks to its solid earnings outlook, and based on these valuation figures, we also feel that JBHT is the superior value option right now.


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J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
 
Old Dominion Freight Line, Inc. (ODFL) : Free Stock Analysis Report
 
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Zacks Investment Research