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TNK vs. KEX: Which Stock Is the Better Value Option?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Transportation - Shipping sector have probably already heard of Teekay Tankers (TNK) and Kirby (KEX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, Teekay Tankers is sporting a Zacks Rank of #1 (Strong Buy), while Kirby has a Zacks Rank of #4 (Sell). This means that TNK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. 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.

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.

TNK currently has a forward P/E ratio of 2.88, while KEX has a forward P/E of 13.54. We also note that TNK has a PEG ratio of 0.96. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. KEX currently has a PEG ratio of 1.39.

Another notable valuation metric for TNK is its P/B ratio of 0.60. 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, KEX has a P/B of 0.72.

These are just a few of the metrics contributing to TNK's Value grade of B and KEX's Value grade of D.

TNK is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that TNK is likely the superior value option right now.


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Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report
 
Kirby Corporation (KEX) : Free Stock Analysis Report
 
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