Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Greif (GEF) or Packaging Corp. (PKG). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Greif has a Zacks Rank of #2 (Buy), while Packaging Corp. has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GEF has an improving earnings outlook. But this is just one factor that value investors are interested in.
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.
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 16.16, while PKG has a forward P/E of 18.56. We also note that GEF has a PEG ratio of 1.64. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PKG currently has a PEG ratio of 2.51.
Another notable valuation metric for GEF is its P/B ratio of 1.39. 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, PKG has a P/B of 3.77.
Based on these metrics and many more, GEF holds a Value grade of A, while PKG has a Value grade of C.
GEF stands above PKG thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GEF is the superior value option right now.
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Greif, Inc. (GEF): Free Stock Analysis Report HDFC Bank Limited (HDB): Free Stock Analysis Report Grupo Aeroportuario Del Pacifico, S.A. de C.V. (PAC): Free Stock Analysis Report Packaging Corporation of America (PKG): Free Stock Analysis Report American Water Works Company, Inc. (AWK): Free Stock Analysis Report Ladder Capital Corp (LADR): Free Stock Analysis Report Chewy (CHWY): Free Stock Analysis Report Adyen N.V. Unsponsored ADR (ADYEY): Free Stock Analysis Report Doximity, Inc. (DOCS): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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