GEF vs. PKG: Which Stock Should Value Investors Buy Now?

PKG GEF

Investors with an interest in Containers - Paper and Packaging stocks have likely encountered both Greif (GEF - Free Report) and Packaging Corp. (PKG - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Both Greif and Packaging Corp. have a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. However, value investors will care about much more than just this.

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 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.

GEF currently has a forward P/E ratio of 7.88, while PKG has a forward P/E of 12.63. We also note that GEF has a PEG ratio of 0.79. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. PKG currently has a PEG ratio of 2.53.

Another notable valuation metric for GEF is its P/B ratio of 1.70. 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, PKG has a P/B of 3.65.

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

Both GEF and PKG are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GEF is the superior value option right now.

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