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Knight-Swift Transportation Holdings Inc. (KNX) - free report >>
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Knight-Swift Transportation Holdings Inc. (KNX) - free report >>
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KNX vs. SAIA: Which Stock Should Value Investors Buy Now?
Investors interested in Transportation - Truck stocks are likely familiar with Knight-Swift Transportation Holdings (KNX - Free Report) and Saia (SAIA - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Knight-Swift Transportation Holdings and Saia are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
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.
KNX currently has a forward P/E ratio of 17.95, while SAIA has a forward P/E of 31.77. We also note that KNX has a PEG ratio of 1.20. 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. SAIA currently has a PEG ratio of 2.51.
Another notable valuation metric for KNX is its P/B ratio of 1.19. 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, SAIA has a P/B of 4.30.
These metrics, and several others, help KNX earn a Value grade of A, while SAIA has been given a Value grade of C.
Both KNX and SAIA are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KNX is the superior value option right now.