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GPK vs. AMCR: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Containers - Paper and Packaging sector might want to consider either Graphic Packaging (GPK - Free Report) or Bemis (AMCR - 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.

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.

Graphic Packaging has a Zacks Rank of #2 (Buy), while Bemis has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that GPK likely has seen a stronger improvement to its earnings outlook than AMCR has recently. But this is only part of the picture for value investors.

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.

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.

GPK currently has a forward P/E ratio of 13.59, while AMCR has a forward P/E of 16.19. We also note that GPK has a PEG ratio of 0.54. 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. AMCR currently has a PEG ratio of 2.23.

Another notable valuation metric for GPK is its P/B ratio of 1.98. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AMCR has a P/B of 3.85.

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

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


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