Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors with an interest in Containers - Paper and Packaging stocks have likely encountered both Greif (GEF - Free Report) and Sealed Air (SEE - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.

Greif and Sealed Air are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. Investors should feel comfortable knowing that GEF likely has seen a stronger improvement to its earnings outlook than SEE has recently. But this is only part of the picture for value investors.

Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

GEF currently has a forward P/E ratio of 13.03, while SEE has a forward P/E of 16.65. We also note that GEF has a PEG ratio of 1.30. 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. SEE currently has a PEG ratio of 2.01.

Another notable valuation metric for GEF is its P/B ratio of 2.10. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SEE has a P/B of 88.38.

These are just a few of the metrics contributing to GEF's Value grade of B and SEE's Value grade of C.

GEF 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 GEF is likely the superior value option right now.


See More Zacks Research for These Tickers


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


Sealed Air Corporation (SEE) - free report >>

Greif, Inc. (GEF) - free report >>

Published in