Investors with an interest in Transportation - Services stocks have likely encountered both ZTO Express (Cayman) Inc. (ZTO) and TFI International Inc. (TFII). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, ZTO Express (Cayman) Inc. is sporting a Zacks Rank of #1 (Strong Buy), while TFI International Inc. has a Zacks Rank of #5 (Strong 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 piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
ZTO currently has a forward P/E ratio of 12.74, while TFII has a forward P/E of 25.43. We also note that ZTO has a PEG ratio of 4.11. 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. TFII currently has a PEG ratio of 6.10.
Another notable valuation metric for ZTO is its P/B ratio of 1.39. 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, TFII has a P/B of 3.31.
Based on these metrics and many more, ZTO holds a Value grade of B, while TFII has a Value grade of D.
ZTO has seen stronger estimate revision activity and sports more attractive valuation metrics than TFII, 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 TFI International Inc. (TFII): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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