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

Zacks Equity Research
·2 min read

Investors with an interest in Transportation - Shipping stocks have likely encountered both 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 and Kirby are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TNK has an improving earnings outlook. But this is just one factor that value investors are interested in.

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 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.

TNK currently has a forward P/E ratio of 2.36, while KEX has a forward P/E of 21.07. We also note that TNK has a PEG ratio of 0.79. 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 2.16.

Another notable valuation metric for TNK is its P/B ratio of 0.60. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, KEX has a P/B of 1.13.

Based on these metrics and many more, TNK holds a Value grade of B, while KEX has a Value grade of D.

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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Zacks Investment Research