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HMLP vs. KEX: Which Stock Is the Better Value Option?

HMLP vs. KEX: Which Stock Is the Better Value Option?

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This story originally appeared on Zacks

Investors interested in Transportation - Shipping stocks are likely familiar with Hoegh LNG (HMLP) and Kirby (KEX). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

- Zacks

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Hoegh LNG and Kirby are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that HMLP likely has seen a stronger improvement to its earnings outlook than KEX has recently. But this is only part of the picture for value investors.

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 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.

HMLP currently has a forward P/E ratio of 3.21, while KEX has a forward P/E of 109.04. We also note that HMLP has a PEG ratio of 0.51. 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. KEX currently has a PEG ratio of 9.09.

Another notable valuation metric for HMLP is its P/B ratio of 0.42. 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, KEX has a P/B of 1.26.

These metrics, and several others, help HMLP earn a Value grade of A, while KEX has been given a Value grade of C.

HMLP sticks out from KEX in both our Zacks Rank and Style Scores models, so value investors will likely feel that HMLP is the better option right now.



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Hoegh LNG Partners LP (HMLP): Free Stock Analysis Report

 

Kirby Corporation (KEX): Free Stock Analysis Report

 

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