ARCB vs. ODFL: Which Stock Should Value Investors Buy Now?
ARCB vs. ODFL: Which Stock Is the Better Value Option?
Investors interested in Transportation - Truck stocks are likely familiar with ArcBest (ARCB) and Old Dominion Freight Line (ODFL). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, ArcBest has a Zacks Rank of #1 (Strong Buy), while Old Dominion Freight Line has a Zacks Rank of #2 (Buy). This means that ARCB's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
ARCB currently has a forward P/E ratio of 11.78, while ODFL has a forward P/E of 33.57. We also note that ARCB has a PEG ratio of 0.40. 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. ODFL currently has a PEG ratio of 1.48.
Another notable valuation metric for ARCB is its P/B ratio of 2.34. 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, ODFL has a P/B of 9.71.
Based on these metrics and many more, ARCB holds a Value grade of B, while ODFL has a Value grade of D.
ARCB 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 ARCB is likely the superior value option right now.
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ArcBest Corporation (ARCB): Free Stock Analysis Report
Old Dominion Freight Line, Inc. (ODFL): Free Stock Analysis Report
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