SMFKY vs. NP: Which Stock Is the Better Value Option?
Investors interested in Paper and Related Products stocks are likely familiar with SMURFIT KAPPA (SMFKY) and Neenah Paper (NP). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
SMURFIT KAPPA has a Zacks Rank of #2 (Buy), while Neenah Paper 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 SMFKY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
SMFKY currently has a forward P/E ratio of 9.39, while NP has a forward P/E of 17.69. We also note that SMFKY has a PEG ratio of 2.09. 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. NP currently has a PEG ratio of 3.54.
Another notable valuation metric for SMFKY is its P/B ratio of 2.10. 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, NP has a P/B of 2.88.
These metrics, and several others, help SMFKY earn a Value grade of A, while NP has been given a Value grade of C.
SMFKY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that SMFKY is likely the superior value option right now.
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SMURFIT KAPPA (SMFKY): Free Stock Analysis Report
Neenah Paper, Inc. (NP): Free Stock Analysis Report
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