Investors looking for stocks in the Transportation - Equipment and Leasing sector might want to consider either Greenbrier Companies (GBX) or Westinghouse Air Brake Technologies (WAB). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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.
Currently, both Greenbrier Companies and Westinghouse Air Brake Technologies are holding a Zacks Rank of #2 (Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
GBX currently has a forward P/E ratio of 6.89, while WAB has a forward P/E of 21.74. We also note that GBX has a PEG ratio of 1.27. 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. WAB currently has a PEG ratio of 1.53.
Another notable valuation metric for GBX is its P/B ratio of 0.84. 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, WAB has a P/B of 3.03.
Based on these metrics and many more, GBX holds a Value grade of A, while WAB has a Value grade of D.
Both GBX and WAB are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GBX is the superior value option right now.
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Greenbrier Companies, Inc. (The) (GBX): Free Stock Analysis Report Wabtec (WAB): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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