Back to top

Image: Bigstock

Is Graphic Packaging Holding Company (GPK) a Great Value Stock Right Now?

Read MoreHide Full Article

Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Graphic Packaging Holding Company (GPK - Free Report) is a stock many investors are watching right now. GPK is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with P/E ratio of 9.53 right now. For comparison, its industry sports an average P/E of 12.30. Over the past 52 weeks, GPK's Forward P/E has been as high as 17.63 and as low as 8.59, with a median of 10.22.

Another notable valuation metric for GPK is its P/B ratio of 3.42. 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. GPK's current P/B looks attractive when compared to its industry's average P/B of 8.46. Over the past year, GPK's P/B has been as high as 3.62 and as low as 2.93, with a median of 3.28.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. GPK has a P/S ratio of 0.83. This compares to its industry's average P/S of 0.93.

Finally, we should also recognize that GPK has a P/CF ratio of 8.62. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 23.48. GPK's P/CF has been as high as 9.25 and as low as 7.32, with a median of 8.43, all within the past year.

Value investors will likely look at more than just these metrics, but the above data helps show that Graphic Packaging Holding Company is likely undervalued currently. And when considering the strength of its earnings outlook, GPK sticks out at as one of the market's strongest value stocks.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Graphic Packaging Holding Company (GPK) - free report >>

Published in