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AMCR vs. ATR: Which Stock Is the Better Value Option?

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·2 min read
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Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Amcor (AMCR) 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.

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.

Amcor has a Zacks Rank of #2 (Buy), while AptarGroup has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AMCR has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

AMCR currently has a forward P/E ratio of 16.40, while ATR has a forward P/E of 37.16. We also note that AMCR has a PEG ratio of 1.90. 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. ATR currently has a PEG ratio of 5.31.

Another notable valuation metric for AMCR is its P/B ratio of 3.84. 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 5.24.

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

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


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