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VRTV vs. KLBAY: Which Stock Is the Better Value Option?

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Investors with an interest in Paper and Related Products stocks have likely encountered both Veritiv and Klabin SA (KLBAY - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Currently, Veritiv has a Zacks Rank of #2 (Buy), while Klabin SA has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VRTV 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 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.

VRTV currently has a forward P/E ratio of 5.25, while KLBAY has a forward P/E of 7.51. We also note that VRTV has a PEG ratio of 0.34. 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. KLBAY currently has a PEG ratio of 1.42.

Another notable valuation metric for VRTV is its P/B ratio of 1.76. 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, KLBAY has a P/B of 2.62.

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

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


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