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UFS vs. NP: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Paper and Related Products stocks have likely encountered both Domtar and Neenah Paper . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 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.

Domtar has a Zacks Rank of #1 (Strong Buy), while Neenah Paper has a Zacks Rank of #3 (Hold) right now. This means that UFS's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

UFS currently has a forward P/E ratio of 14.21, while NP has a forward P/E of 19.14. We also note that UFS has a PEG ratio of 2.84. 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. NP currently has a PEG ratio of 3.83.

Another notable valuation metric for UFS is its P/B ratio of 1.20. 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, NP has a P/B of 3.47.

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

UFS sticks out from NP in both our Zacks Rank and Style Scores models, so value investors will likely feel that UFS is the better option right now.