Investors with an interest in Containers - Paper and Packaging stocks have likely encountered both Berry Global (BERY - 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Berry Global is sporting a Zacks Rank of #1 (Strong Buy), while AptarGroup has a Zacks Rank of #3 (Hold). This means that BERY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
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.
BERY currently has a forward P/E ratio of 10.97, while ATR has a forward P/E of 26.57. We also note that BERY has a PEG ratio of 0.88. 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 2.57.
Another notable valuation metric for BERY is its P/B ratio of 3.66. 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 4.66.
These metrics, and several others, help BERY earn a Value grade of A, while ATR has been given a Value grade of D.
BERY sticks out from ATR in both our Zacks Rank and Style Scores models, so value investors will likely feel that BERY is the better option right now.