Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Graphic Packaging (GPK) or AptarGroup (ATR). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.
Graphic Packaging and AptarGroup are both sporting a Zacks Rank of # 1 (Strong Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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.
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.
GPK currently has a forward P/E ratio of 8.70, while ATR has a forward P/E of 27.79. We also note that GPK has a PEG ratio of 0.35. 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. ATR currently has a PEG ratio of 3.97.
Another notable valuation metric for GPK is its P/B ratio of 3.50. 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, ATR has a P/B of 3.55.
Based on these metrics and many more, GPK holds a Value grade of A, while ATR has a Value grade of C.
Both GPK and ATR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GPK is the superior value option right now.
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