Back to top

Image: Bigstock

GPK or AMCR: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in stocks from the Containers - Paper and Packaging sector have probably already heard of Graphic Packaging (GPK - Free Report) and Bemis (AMCR - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Graphic Packaging has a Zacks Rank of #2 (Buy), while Bemis has a Zacks Rank of #3 (Hold) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that GPK has an improving earnings outlook. But this is just one factor that value investors are interested in.

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.

GPK currently has a forward P/E ratio of 13.39, while AMCR has a forward P/E of 16.13. We also note that GPK has a PEG ratio of 0.54. 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. AMCR currently has a PEG ratio of 2.22.

Another notable valuation metric for GPK is its P/B ratio of 1.95. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AMCR has a P/B of 3.84.

These are just a few of the metrics contributing to GPK's Value grade of A and AMCR's Value grade of C.

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


See More Zacks Research for These Tickers


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


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

Amcor PLC (AMCR) - free report >>

Published in