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GPK or AMCR: Which Is the Better Value Stock Right Now?

Zacks Equity Research

Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Graphic Packaging (GPK) or Bemis (AMCR). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Graphic Packaging has a Zacks Rank of #2 (Buy), while Bemis has a Zacks Rank of #3 (Hold) right now. 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 only part of the picture for value investors.

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.

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 15.63, while AMCR has a forward P/E of 18.05. We also note that GPK has a PEG ratio of 0.92. 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. AMCR currently has a PEG ratio of 2.41.

Another notable valuation metric for GPK is its P/B ratio of 2.26. 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, AMCR has a P/B of 3.18.

These are just a few of the metrics contributing to GPK's Value grade of B and AMCR's Value grade of D.

GPK is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that GPK is likely the superior value option right now.


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Graphic Packaging Holding Company (GPK) : Free Stock Analysis Report
 
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