Investors interested in Transportation - Services stocks are likely familiar with ZTO Express (Cayman) Inc. (ZTO) and Grupo Aeroportuario del Sureste (ASR). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, ZTO Express (Cayman) Inc. is sporting a Zacks Rank of #2 (Buy), while Grupo Aeroportuario del Sureste has a Zacks Rank of #4 (Sell). This means that ZTO'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 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.
ZTO currently has a forward P/E ratio of 12.35, while ASR has a forward P/E of 14.83. We also note that ZTO has a PEG ratio of 7.22. 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. ASR currently has a PEG ratio of 8.57.
Another notable valuation metric for ZTO is its P/B ratio of 1.25. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ASR has a P/B of 2.92.
These metrics, and several others, help ZTO earn a Value grade of B, while ASR has been given a Value grade of D.
ZTO has seen stronger estimate revision activity and sports more attractive valuation metrics than ASR, so it seems like value investors will conclude that ZTO is the superior option right now.
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ZTO Express (Cayman) Inc. (ZTO): Free Stock Analysis Report Grupo Aeroportuario del Sureste, S.A. de C.V. (ASR): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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