Investors interested in stocks from the Paper and Related Products sector have probably already heard of Domtar and Neenah Paper . 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Domtar has a Zacks Rank of #1 (Strong Buy), while Neenah Paper has a Zacks Rank of #5 (Strong Sell) right now. This means that UFS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
UFS currently has a forward P/E ratio of 10.20, while NP has a forward P/E of 20.02. We also note that UFS has a PEG ratio of 2.04. 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. NP currently has a PEG ratio of 4.01.
Another notable valuation metric for UFS is its P/B ratio of 1.13. 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, NP has a P/B of 3.06.
These metrics, and several others, help UFS earn a Value grade of A, while NP has been given a Value grade of D.
UFS 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 UFS is likely the superior value option right now.
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UFS vs. NP: Which Stock Is the Better Value Option?
Investors interested in stocks from the Paper and Related Products sector have probably already heard of Domtar and Neenah Paper . 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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Domtar has a Zacks Rank of #1 (Strong Buy), while Neenah Paper has a Zacks Rank of #5 (Strong Sell) right now. This means that UFS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
UFS currently has a forward P/E ratio of 10.20, while NP has a forward P/E of 20.02. We also note that UFS has a PEG ratio of 2.04. 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. NP currently has a PEG ratio of 4.01.
Another notable valuation metric for UFS is its P/B ratio of 1.13. 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, NP has a P/B of 3.06.
These metrics, and several others, help UFS earn a Value grade of A, while NP has been given a Value grade of D.
UFS 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 UFS is likely the superior value option right now.