TNK vs. KEX: Which Stock Is the Better Value Option?
Investors interested in Transportation - Shipping stocks are likely familiar with Teekay Tankers (TNK) and Kirby (KEX). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Teekay Tankers has a Zacks Rank of #1 (Strong Buy), while Kirby has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TNK is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
TNK currently has a forward P/E ratio of 3.50, while KEX has a forward P/E of 20.14. We also note that TNK has a PEG ratio of 1.17. 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. KEX currently has a PEG ratio of 1.68.
Another notable valuation metric for TNK is its P/B ratio of 1.25. 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 1.44.
Based on these metrics and many more, TNK holds a Value grade of A, while KEX has a Value grade of C.
TNK stands above KEX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TNK is 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
