ARCB vs. SAIA: Which Stock Is the Better Value Option?

Investors looking for stocks in the Transportation - Truck sector might want to consider either ArcBest (ARCB) or Saia (SAIA). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

ArcBest has a Zacks Rank of #2 (Buy), while Saia has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that ARCB likely has seen a stronger improvement to its earnings outlook than SAIA has recently. However, value investors will care about much more than just this.

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.

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.

ARCB currently has a forward P/E ratio of 21.88, while SAIA has a forward P/E of 36.22. We also note that ARCB has a PEG ratio of 0.63. 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. SAIA currently has a PEG ratio of 1.97.

Another notable valuation metric for ARCB is its P/B ratio of 2. 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, SAIA has a P/B of 4.11.

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

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

Zacks' Research Chief Names "Stock Most Likely to Double"

Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.

This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research