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ALSMY vs. CNI: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Transportation - Rail sector have probably already heard of Alstom ADR (ALSMY - Free Report) and Canadian National (CNI - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Alstom ADR and Canadian National 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 ALSMY has an improving earnings outlook. But this is just one piece of the puzzle 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.

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.

ALSMY currently has a forward P/E ratio of 15.81, while CNI has a forward P/E of 21.05. We also note that ALSMY has a PEG ratio of 1.43. 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. CNI currently has a PEG ratio of 1.99.

Another notable valuation metric for ALSMY is its P/B ratio of 0.74. 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, CNI has a P/B of 4.73.

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

ALSMY stands above CNI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that ALSMY is the superior value option right now.


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