Back to top

Image: Bigstock

DHLGY vs. EXPD: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors with an interest in Transportation - Services stocks have likely encountered both DHL Group Sponsored ADR (DHLGY - Free Report) and Expeditors International (EXPD - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

DHL Group Sponsored ADR has a Zacks Rank of #2 (Buy), while Expeditors International has a Zacks Rank of #3 (Hold) right now. This means that DHLGY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

DHLGY currently has a forward P/E ratio of 13.37, while EXPD has a forward P/E of 22.15. We also note that DHLGY has a PEG ratio of 2.64. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. EXPD currently has a PEG ratio of 5.09.

Another notable valuation metric for DHLGY is its P/B ratio of 2.27. 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, EXPD has a P/B of 7.59.

These are just a few of the metrics contributing to DHLGY's Value grade of B and EXPD's Value grade of D.

DHLGY 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 DHLGY is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Expeditors International of Washington, Inc. (EXPD) - free report >>

DHL Group Sponsored ADR (DHLGY) - free report >>

Published in