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SMFKY vs. NP: Which Stock Is the Better Value Option?

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Investors interested in Paper and Related Products stocks are likely familiar with SMURFIT KAPPA (SMFKY - Free Report) and Neenah Paper . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify 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. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that SMFKY is likely seeing its earnings outlook improve to a greater extent. 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.

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.

SMFKY currently has a forward P/E ratio of 8.82, while NP has a forward P/E of 17.12. We also note that SMFKY has a PEG ratio of 1.96. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NP currently has a PEG ratio of 3.42.

Another notable valuation metric for SMFKY is its P/B ratio of 2.15. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NP has a P/B of 2.78.

Based on these metrics and many more, SMFKY holds a Value grade of A, while NP has a Value grade of D.

SMFKY has seen stronger estimate revision activity and sports more attractive valuation metrics than NP, so it seems like value investors will conclude that SMFKY is the superior option right now.


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