Investors interested in Transportation - Truck stocks are likely familiar with Werner Enterprises (WERN) and JB Hunt (JBHT). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Werner Enterprises and JB Hunt are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that WERN is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle 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.
WERN currently has a forward P/E ratio of 14.96, while JBHT has a forward P/E of 21.23. We also note that WERN has a PEG ratio of 1.03. 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. JBHT currently has a PEG ratio of 1.77.
Another notable valuation metric for WERN is its P/B ratio of 1.99. 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, JBHT has a P/B of 5.99.
These metrics, and several others, help WERN earn a Value grade of A, while JBHT has been given a Value grade of C.
WERN has seen stronger estimate revision activity and sports more attractive valuation metrics than JBHT, so it seems like value investors will conclude that WERN is the superior option right now.
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Werner Enterprises, Inc. (WERN) : Free Stock Analysis Report
J.B. Hunt Transport Services, Inc. (JBHT) : Free Stock Analysis Report
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