Investors interested in stocks from the Transportation - Truck sector have probably already heard of Werner Enterprises (WERN) and JB Hunt (JBHT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, Werner Enterprises is sporting a Zacks Rank of #2 (Buy), while JB Hunt has a Zacks Rank of #3 (Hold). This means that WERN's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
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.
WERN currently has a forward P/E ratio of 14.31, while JBHT has a forward P/E of 19.26. We also note that WERN has a PEG ratio of 0.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. JBHT currently has a PEG ratio of 1.60.
Another notable valuation metric for WERN is its P/B ratio of 1.90. 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 5.48.
These are just a few of the metrics contributing to WERN's Value grade of A and JBHT's Value grade of C.
WERN 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 WERN is likely the superior value 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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