Investors interested in Containers - Paper and Packaging stocks are likely familiar with Greif (GEF) and AptarGroup (ATR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Greif has a Zacks Rank of #2 (Buy), while AptarGroup has a Zacks Rank of #3 (Hold) 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. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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 10.66, while ATR has a forward P/E of 28.43. We also note that GEF has a PEG ratio of 1.23. 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 2.75.
Another notable valuation metric for GEF is its P/B ratio of 1.67. 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 4.79.
These are just a few of the metrics contributing to GEF's Value grade of A and ATR's Value grade of D.
GEF sticks out from ATR in both our Zacks Rank and Style Scores models, so value investors will likely feel that GEF is the better option right now.
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