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SON vs. ATR: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Containers - Paper and Packaging sector have probably already heard of Sonoco (SON - Free Report) and AptarGroup (ATR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, Sonoco is sporting a Zacks Rank of #2 (Buy), while AptarGroup has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SON has an improving earnings outlook. 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.

SON currently has a forward P/E ratio of 10.99, while ATR has a forward P/E of 27.19. We also note that SON has a PEG ratio of 2.20. 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. ATR currently has a PEG ratio of 3.88.

Another notable valuation metric for SON is its P/B ratio of 3. 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 3.57.

Based on these metrics and many more, SON holds a Value grade of B, while ATR has a Value grade of C.

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


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