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GEF or PKG: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Greif (GEF - Free Report) or 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.

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

Right now, Greif is sporting a Zacks Rank of #1 (Strong Buy), while Packaging Corp. has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that GEF is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.

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 12.58, while PKG has a forward P/E of 18.32. We also note that GEF has a PEG ratio of 1.26. 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. PKG currently has a PEG ratio of 3.66.

Another notable valuation metric for GEF is its P/B ratio of 2.02. 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, PKG has a P/B of 3.92.

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


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