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RYAM vs. SEOAY: Which Stock Should Value Investors Buy Now?

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Zacks Equity Research
·2 min read
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Investors looking for stocks in the Paper and Related Products sector might want to consider either Rayonier Advanced Materials (RYAM) or Stora Enso Oyj (SEOAY). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Both Rayonier Advanced Materials and Stora Enso Oyj have a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

RYAM currently has a forward P/E ratio of 13.96, while SEOAY has a forward P/E of 16.93. We also note that RYAM has a PEG ratio of 0.37. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SEOAY currently has a PEG ratio of 2.08.

Another notable valuation metric for RYAM is its P/B ratio of 0.89. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, SEOAY has a P/B of 1.80.

These metrics, and several others, help RYAM earn a Value grade of A, while SEOAY has been given a Value grade of C.

Both RYAM and SEOAY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that RYAM is the superior value option right now.


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Rayonier Advanced Materials Inc. (RYAM) : Free Stock Analysis Report
 
Stora Enso Oyj (SEOAY) : Free Stock Analysis Report
 
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Zacks Investment Research