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IP vs. NP: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Paper and Related Products sector might want to consider either International Paper (IP - Free Report) or Neenah Paper . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, International Paper is sporting a Zacks Rank of #2 (Buy), while Neenah Paper has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that IP likely has seen a stronger improvement to its earnings outlook than NP has recently. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
IP currently has a forward P/E ratio of 9.94, while NP has a forward P/E of 21.20. We also note that IP has a PEG ratio of 1.05. 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. NP currently has a PEG ratio of 4.24.
Another notable valuation metric for IP is its P/B ratio of 3.09. 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 3.84.
Based on these metrics and many more, IP holds a Value grade of A, while NP has a Value grade of C.
IP sticks out from NP in both our Zacks Rank and Style Scores models, so value investors will likely feel that IP is the better option right now.
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IP vs. NP: Which Stock Should Value Investors Buy Now?
Investors looking for stocks in the Paper and Related Products sector might want to consider either International Paper (IP - Free Report) or Neenah Paper . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, International Paper is sporting a Zacks Rank of #2 (Buy), while Neenah Paper has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that IP likely has seen a stronger improvement to its earnings outlook than NP has recently. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
IP currently has a forward P/E ratio of 9.94, while NP has a forward P/E of 21.20. We also note that IP has a PEG ratio of 1.05. 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. NP currently has a PEG ratio of 4.24.
Another notable valuation metric for IP is its P/B ratio of 3.09. 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 3.84.
Based on these metrics and many more, IP holds a Value grade of A, while NP has a Value grade of C.
IP sticks out from NP in both our Zacks Rank and Style Scores models, so value investors will likely feel that IP is the better option right now.