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

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Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Graphic Packaging (GPK - Free Report) or 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Graphic Packaging is sporting a Zacks Rank of #1 (Strong Buy), while AptarGroup has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GPK likely has seen a stronger improvement to its earnings outlook than ATR has recently. However, value investors will care about much more than just this.

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 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 8.91, while ATR has a forward P/E of 30.80. We also note that GPK has a PEG ratio of 0.36. 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 4.40.

Another notable valuation metric for GPK is its P/B ratio of 3.49. 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, ATR has a P/B of 3.74.

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

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


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

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