KHNGY vs. CHRW: Which Stock Is the Better Value Option?

Investors looking for stocks in the Transportation - Services sector might want to consider either Kuehne & Nagel International Ag (KHNGY) or C.H. Robinson Worldwide (CHRW). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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. However, value investors will care about much more than just this.

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.

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.

KHNGY currently has a forward P/E ratio of 23.06, while CHRW has a forward P/E of 28.43. We also note that KHNGY has a PEG ratio of 1.26. 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. CHRW currently has a PEG ratio of 1.77.

Another notable valuation metric for KHNGY is its P/B ratio of 9.79. 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, CHRW has a P/B of 10.74.

Based on these metrics and many more, KHNGY holds a Value grade of B, while CHRW has a Value grade of C.

KHNGY has seen stronger estimate revision activity and sports more attractive valuation metrics than CHRW, so it seems like value investors will conclude that KHNGY is the superior option right now.

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

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