KHNGY vs. CHRW: Which Stock Should Value Investors Buy Now?

Investors interested in stocks from the Transportation - Services sector have probably already heard of Kuehne & Nagel International Ag (KHNGY) and C.H. Robinson Worldwide (CHRW). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Kuehne & Nagel International Ag and C.H. Robinson Worldwide are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that KHNGY likely has seen a stronger improvement to its earnings outlook than CHRW 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.

KHNGY currently has a forward P/E ratio of 25.30, while CHRW has a forward P/E of 30.87. We also note that KHNGY has a PEG ratio of 1.38. 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. CHRW currently has a PEG ratio of 1.96.

Another notable valuation metric for KHNGY is its P/B ratio of 10.74. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, CHRW has a P/B of 11.48.

These metrics, and several others, help KHNGY earn a Value grade of B, while CHRW has been given a Value grade of D.

KHNGY 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 KHNGY is likely the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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