Investors looking for stocks in the Containers – Paper and Packaging sector might want to consider either Berry Global (BERY) or AptarGroup (ATR). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Berry Global and AptarGroup are sporting Zacks Ranks of #1 (Strong Buy) and #4 (Sell), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BERY is likely seeing its earnings outlook improve to a greater extent. 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.
BERY currently has a forward P/E ratio of 9.07, while ATR has a forward P/E of 33.59. We also note that BERY has a PEG ratio of 0.91. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company’s expected earnings growth rate. ATR currently has a PEG ratio of 4.80.
Another notable valuation metric for BERY is its P/B ratio of 2.79. The P/B is a method of comparing a stock’s market value to its book value, which is defined as total assets minus total liabilities. By comparison, ATR has a P/B of 4.28.
Based on these metrics and many more, BERY holds a Value grade of A, while ATR has a Value grade of C.
BERY stands above ATR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that BERY is the superior value option right now.
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