GPK or AMCR: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Containers - Paper and Packaging sector have probably already heard of Graphic Packaging (GPK) and Bemis (AMCR). 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.
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 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 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.
GPK currently has a forward P/E ratio of 13.59, while AMCR has a forward P/E of 16.57. We also note that GPK has a PEG ratio of 0.54. 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. AMCR currently has a PEG ratio of 2.28.
Another notable valuation metric for GPK is its P/B ratio of 1.98. 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, AMCR has a P/B of 3.94.
These metrics, and several others, help GPK earn a Value grade of A, while AMCR has been given a Value grade of C.
GPK has seen stronger estimate revision activity and sports more attractive valuation metrics than AMCR, so it seems like value investors will conclude that GPK is the superior option right now.
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Graphic Packaging Holding Company (GPK): Free Stock Analysis Report
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.