SON or ATR: Which Is the Better Value Stock Right Now?
Investors with an interest in Containers - Paper and Packaging stocks have likely encountered both Sonoco (SON) and AptarGroup (ATR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Sonoco is sporting a Zacks Rank of #2 (Buy), while AptarGroup has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SON has an improving earnings outlook. However, value investors will care about much more than just this.
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.
SON currently has a forward P/E ratio of 17, while ATR has a forward P/E of 34.70. We also note that SON has a PEG ratio of 3.40. 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. ATR currently has a PEG ratio of 4.96.
Another notable valuation metric for SON is its P/B ratio of 3.09. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ATR has a P/B of 4.56.
Based on these metrics and many more, SON holds a Value grade of B, while ATR has a Value grade of D.
SON 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 SON is likely the superior value option right now.
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Sonoco Products Company (SON): 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.