Investors with an interest in Paper and Related Products stocks have likely encountered both Suzano S.A. Sponsored ADR (SUZ) and Klabin SA (KLBAY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Suzano S.A. Sponsored ADR has a Zacks Rank of #1 (Strong Buy), while Klabin SA has a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SUZ has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
SUZ currently has a forward P/E ratio of 9.47, while KLBAY has a forward P/E of 9.55. We also note that SUZ has a PEG ratio of 0.22. 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 1.03.
Another notable valuation metric for SUZ is its P/B ratio of 1.76. 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, KLBAY has a P/B of 9.41.
Based on these metrics and many more, SUZ holds a Value grade of A, while KLBAY has a Value grade of C.
SUZ sticks out from KLBAY in both our Zacks Rank and Style Scores models, so value investors will likely feel that SUZ is the better option right now.
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Suzano S.A. Sponsored ADR (SUZ): Free Stock Analysis Report Klabin SA (KLBAY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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