Investors interested in Transportation - Airline stocks are likely familiar with International Consolidated Airlines Group SA (ICAGY) and Ryanair (RYAAY). 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 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.

Currently, International Consolidated Airlines Group SA has a Zacks Rank of #1 (Strong Buy), while Ryanair has a Zacks Rank of #5 (Strong Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that ICAGY is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.

ICAGY currently has a forward P/E ratio of 5.42, while RYAAY has a forward P/E of 15.48. We also note that ICAGY has a PEG ratio of 0.87. 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. RYAAY currently has a PEG ratio of 2.65.

Another notable valuation metric for ICAGY is its P/B ratio of 1.04. 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, RYAAY has a P/B of 3.05.

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

ICAGY 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 ICAGY is likely the superior value option right now.

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International Consolidated Airlines Group SA (ICAGY) : Free Stock Analysis Report