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GPK vs. ATR: Which Stock Should Value Investors Buy Now?

·2-min read

Investors interested in stocks from the Containers - Paper and Packaging sector have probably already heard of Graphic Packaging (GPK) and 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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.

Right now, Graphic Packaging is sporting a Zacks Rank of #1 (Strong Buy), while AptarGroup has a Zacks Rank of #3 (Hold). This means that GPK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

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 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.

GPK currently has a forward P/E ratio of 9.62, while ATR has a forward P/E of 25.06. We also note that GPK has a PEG ratio of 0.38. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. ATR currently has a PEG ratio of 3.58.

Another notable valuation metric for GPK is its P/B ratio of 3.24. 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, ATR has a P/B of 3.29.

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

GPK stands above ATR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GPK is the superior value option right now.


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