TFII vs. CHRW: Which Stock Is the Better Value Option?

Investors interested in Transportation - Services stocks are likely familiar with TFI International Inc. (TFII) and C.H. Robinson Worldwide (CHRW). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, TFI International Inc. has a Zacks Rank of #2 (Buy), while C.H. Robinson Worldwide has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TFII has an improving earnings outlook. However, value investors will care about much more than just this.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

TFII currently has a forward P/E ratio of 22.87, while CHRW has a forward P/E of 23.37. We also note that TFII has a PEG ratio of 0.86. 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. CHRW currently has a PEG ratio of 1.22.

Another notable valuation metric for TFII is its P/B ratio of 4.16. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, CHRW has a P/B of 10.38.

These metrics, and several others, help TFII earn a Value grade of B, while CHRW has been given a Value grade of C.

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

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

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