VRTV or KLBAY: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Paper and Related Products sector might want to consider either Veritiv (VRTV) or Klabin SA (KLBAY). 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.
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 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.
Right now, Veritiv is sporting a Zacks Rank of #2 (Buy), while Klabin SA has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that VRTV likely has seen a stronger improvement to its earnings outlook than KLBAY has recently. However, value investors will care about much more than just this.
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.
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.
VRTV currently has a forward P/E ratio of 6.66, while KLBAY has a forward P/E of 9.69. We also note that VRTV has a PEG ratio of 0.43. 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. KLBAY currently has a PEG ratio of 1.83.
Another notable valuation metric for VRTV is its P/B ratio of 2.24. 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, KLBAY has a P/B of 2.83.
These are just a few of the metrics contributing to VRTV's Value grade of A and KLBAY's Value grade of C.
VRTV has seen stronger estimate revision activity and sports more attractive valuation metrics than KLBAY, so it seems like value investors will conclude that VRTV is the superior option right now.
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Veritiv Corporation (VRTV) : Free Stock Analysis Report
Klabin SA (KLBAY) : Free Stock Analysis Report
