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

Investors looking for stocks in the Transportation - Services sector might want to consider either Proficient Auto Logistics, Inc. (PAL) or 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.

Proficient Auto Logistics, Inc. and C.H. Robinson Worldwide are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PAL has an improving earnings outlook. But this is only part of the picture for value investors.

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.

PAL currently has a forward P/E ratio of 12.40, while CHRW has a forward P/E of 18.91. We also note that PAL has a PEG ratio of 0.83. 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 1.37.

Another notable valuation metric for PAL is its P/B ratio of 0.66. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, CHRW has a P/B of 6.12.

These are just a few of the metrics contributing to PAL's Value grade of B and CHRW's Value grade of C.

PAL 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 PAL 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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