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SPPJY vs. KLBAY: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Paper and Related Products sector might want to consider either Sappi Ltd. (SPPJY - Free Report) or Klabin SA (KLBAY - 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Sappi Ltd. has a Zacks Rank of #2 (Buy), while Klabin SA 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 SPPJY has an improving earnings outlook. However, value investors will care about much more than just this.

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.

SPPJY currently has a forward P/E ratio of 10.92, while KLBAY has a forward P/E of 25.14. We also note that SPPJY has a PEG ratio of 0.29. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. KLBAY currently has a PEG ratio of 1.62.

Another notable valuation metric for SPPJY is its P/B ratio of 0.26. 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, KLBAY has a P/B of 6.79.

These metrics, and several others, help SPPJY earn a Value grade of A, while KLBAY has been given a Value grade of C.

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

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