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Investors interested in Containers - Paper and Packaging stocks are likely familiar with Greif (GEF) and UFP Technologies (UFPT). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Greif and UFP Technologies are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. This means that GEF'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 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.
GEF currently has a forward P/E ratio of 9.41, while UFPT has a forward P/E of 28.22. We also note that GEF has a PEG ratio of 0.94. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. UFPT currently has a PEG ratio of 2.35.
Another notable valuation metric for GEF is its P/B ratio of 1.91. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, UFPT has a P/B of 2.63.
These are just a few of the metrics contributing to GEF's Value grade of A and UFPT's Value grade of D.
GEF has seen stronger estimate revision activity and sports more attractive valuation metrics than UFPT, so it seems like value investors will conclude that GEF is the superior option right now.
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Greif, Inc. (GEF) : Free Stock Analysis Report
UFP Technologies, Inc. (UFPT) : Free Stock Analysis Report
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