TNK vs. KEX: Which Stock Is the Better Value Option?
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Teekay Tankers and Kirby are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, 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 only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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 2.95, while KEX has a forward P/E of 22.13. We also note that TNK has a PEG ratio of 0.98. 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. KEX currently has a PEG ratio of 1.84.
Another notable valuation metric for TNK is its P/B ratio of 1.04. 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 1.58.
Based on these metrics and many more, TNK holds a Value grade of A, while KEX has a Value grade of C.
TNK sticks out from KEX in both our Zacks Rank and Style Scores models, so value investors will likely feel that TNK is the better option right now.
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Teekay Tankers Ltd. (TNK) : Free Stock Analysis Report
Kirby Corporation (KEX) : Free Stock Analysis Report
