Yahoo Finance VRTV vs. KLBAY: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Paper and Related Products sector have probably already heard of Veritiv (VRTV) and Klabin SA (KLBAY). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Veritiv is sporting a Zacks Rank of #1 (Strong Buy), while Klabin SA has a Zacks Rank of #5 (Strong Sell). Investors should feel comfortable knowing that VRTV likely has seen a stronger improvement to its earnings outlook than KLBAY 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.
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.
VRTV currently has a forward P/E ratio of 5.89, while KLBAY has a forward P/E of 6.84. We also note that VRTV 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. KLBAY currently has a PEG ratio of 1.29.
Another notable valuation metric for VRTV is its P/B ratio of 2.05. 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, KLBAY has a P/B of 2.38.
These metrics, and several others, help VRTV earn a Value grade of A, while KLBAY has been given a Value grade of D.
VRTV has seen stronger estimate revision activity and sports more attractive valuation metrics than KLBAY, so it seems like value investors will conclude that VRTV is the superior option right now.
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Veritiv Corporation (VRTV) : Free Stock Analysis Report
Klabin SA (KLBAY) : Free Stock Analysis Report
