Investors with an interest in Transportation – Services stocks have likely encountered both Hub Group (HUBG) and Grupo Aeroportuario del Pacifico (PAC). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 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, Hub Group is sporting a Zacks Rank of #2 (Buy), while Grupo Aeroportuario del Pacifico has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that HUBG likely has seen a stronger improvement to its earnings outlook than PAC has recently. 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 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.
HUBG currently has a forward P/E ratio of 20.50, while PAC has a forward P/E of 20.58. We also note that HUBG has a PEG ratio of 1.37. 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. PAC currently has a PEG ratio of 4.38.
Another notable valuation metric for HUBG is its P/B ratio of 2.15. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PAC has a P/B of 4.31.
These are just a few of the metrics contributing to HUBG's Value grade of A and PAC's Value grade of D.
HUBG stands above PAC thanks to its solid earnings outlook, and based on these valuation figures, we also feel that HUBG is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Be the first to comment