USX vs. ZTO: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Transportation - Services sector might want to consider either U.S. Xpress (USX) or ZTO Express Cayman Inc. (ZTO). But which of these two stocks presents investors with the better value opportunity right now? 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.
U.S. Xpress and ZTO Express Cayman Inc. are sporting Zacks Ranks of #2 (Buy) and #4 (Sell), respectively, right now. This means that USX's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
USX currently has a forward P/E ratio of 9.34, while ZTO has a forward P/E of 23.29. We also note that USX has a PEG ratio of 0.18. 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. ZTO currently has a PEG ratio of 1.31.
Another notable valuation metric for USX is its P/B ratio of 0.56. 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, ZTO has a P/B of 2.13.
These are just a few of the metrics contributing to USX's Value grade of A and ZTO's Value grade of C.
USX 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 USX is likely the superior value option right now.
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U.S. Xpress Enterprises, Inc. (USX) : Free Stock Analysis Report
ZTO Express Cayman Inc. (ZTO) : Free Stock Analysis Report
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