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

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Investors with an interest in Containers - Paper and Packaging stocks have likely encountered both Packaging Corp. (PKG - Free Report) and AptarGroup (ATR - Free Report) . 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.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Packaging Corp. has a Zacks Rank of #2 (Buy), while AptarGroup has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that PKG has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.

PKG currently has a forward P/E ratio of 19.92, while ATR has a forward P/E of 34.03. We also note that PKG has a PEG ratio of 3.98. 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. ATR currently has a PEG ratio of 4.86.

Another notable valuation metric for PKG is its P/B ratio of 3.47. 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, ATR has a P/B of 4.47.

These are just a few of the metrics contributing to PKG's Value grade of B and ATR's Value grade of D.

PKG stands above ATR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that PKG is the superior value option right now.


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