Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 3 stocks made the list for top value stocks in the Paper Packaging industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Latest Paper Packaging Stock News

Before choosing which top Paper Packaging stock to buy, be sure to conduct proper due diligence: analyze various financial metrics and look at historical data, public statements and news coverage.

We have a neutral fundamental outlook for the paper packaging sub-industry. The Covid-19 pandemic has driven significantly lower demand for industrial packaging and a bleak outlook for printing paper. Despite the negative short-term demand outlook, the recent consolidation in the industry will likely lead to better supply discipline than experienced in the past, helping to balance the market. Companies in this sub-industry make a variety of products used to package and protect items during shipment, including containerboard, corrugated boxes, tubes and cores, and multi-wall sacks. Products that are shipped in paper packaging include large and small appliances, electronic items, agricultural products, processed food, and cement. The paper packaging industry excludes diversified packaging companies that have substantial operations in metal, plastic, or glass (classified in the metal & glass containers sub-industry) and excludes manufacturers of cardboard stock (classified in the paper products sub-industry). The primary competitive factors in this subindustry include price, design, quality, product innovation, and service. Larger customers, with large geographical breadth, usually seek large, geographically diversified suppliers that can supply all or a large proportion of their packaging needs, which has led to significant consolidation in the space. The industry also faces competition from materials other than paperboard and container-board packaging. Paper packaging companies operate in a very competitive global marketplace. Paper packaging companies are affected by a range of macroeconomic conditions, including the strength of the economy in the U.S. and abroad, industry capacity changes, exchange rates and global competition. Demand in this sub-industry has historically been closely tied to the overall strength of the economy, and can be quite cyclical and seasonal.

Why Focus on Undervalued Paper Packaging Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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3 Undervalued Paper Packaging Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 3 undervalued stocks in the Paper Packaging industry for Wednesday, February 07, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Paper Packaging industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

DSS Inc’s Value Grade

Value Grade:

DSS, Inc. is a multinational company. The Company operates its business through nine divisions: Product Packaging, Biotechnology, Direct Marketing, Commercial Lending, Securities and Investment Management, Alternative Trading, Digital Transformation, Secure Living, and Alternative Energy. Product Packaging operates through Premier Packaging Corporation, Inc., which markets, manufactures, and sells sophisticated custom folding cartons, mailers, photo sleeves and complex three-dimensional direct mail solutions. Biotechnology operates through Impact BioMedical, Inc., which targets unmet, urgent medical needs and expands the borders of medical and pharmaceutical science. Direct Marketing offers nutritional and personal care products. Commercial Lending operates through American Pacific Bancorp, which provides an integrated suite of financial services for businesses. Alternative Trading develops and acquires assets and investments in the securities trading and funds management arena.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

DSS Inc has a Value Score of 85, which is considered to be undervalued.

When you look at DSS Inc’s price-to-sales ratio at 0.35 compared to the industry median at 0.80, this company has a lower price relative to revenue compared to its peers. This could make DSS Inc’s stock more attractive for value investors.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. DSS Inc’s shareholder yield is lower than its industry median ratio of 2.77%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. DSS Inc’s price-to-book ratio is lower than its industry median ratio of 0.97. This could make DSS Inc more attractive to investors looking for a new addition to their portfolio.

Graphic Packaging Holding Company’s Value Grade

Value Grade:

Graphic Packaging Holding Company is a provider of fiber-based packaging solutions for a variety of products to food, beverage, food service and other consumer products companies. Its segments include Paperboard Mills, Americas Paperboard Packaging and Europe Paperboard Packaging. The Paperboard Mills segment includes over seven North American paperboard mills that produce primarily solid bleached sulfate, coated unbleached kraft and coated recycled board. Americas Paperboard Packaging segment includes paperboard packaging, primarily folding cartons, sold to consumer-packaged goods (CPG) companies, and cups, lids and food containers sold to food service companies and quick-service restaurants serving the food, beverage, and consumer product markets in the Americas. The Europe Paperboard Packaging segment includes paperboard packaging, primarily folding cartons, sold to CPG companies serving the food, beverage and consumer product markets including healthcare and beauty in Europe.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Graphic Packaging Holding Company has a Value Score of 72, which is considered to be undervalued.

Graphic Packaging Holding Company’s price-earnings ratio is 11.2 compared to the industry median at 11.4. This means that it has a lower price relative to its earnings compared to its peers. This makes Graphic Packaging Holding Company more attractive for value investors.

Graphic Packaging Holding Company’s price-to-book ratio is lower than its peers. This could make Graphic Packaging Holding Company more attractive for value investors when compared to the industry median at 0.97.

You can read more about Graphic Packaging Holding Company’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

International Paper Co’s Value Grade

Value Grade:

International Paper Company is a producer of renewable fiber-based packaging and pulp products with manufacturing operations. The Company operates through two segments: Industrial Packaging and Global Cellulose Fibers. The Industrial Packaging segment is a manufacturer of containerboard in the United States. The Industrial Packaging segment offers products, including linerboard, medium, white top, recycled linerboard, recycled medium and saturating kraft. The Cellulose Fibers segment offers a product portfolio, including fluff, market and specialty pulps. The Company operates over 24 pulp and packaging mills, approximately 164 converting and packaging plants, over 16 recycling plants and over three bag facilities. The Company?s production facilities are located in Canada, Europe, North Africa and Latin America, which includes over four pulp and packaging mills, approximately 37 converting and packaging plants, and over two recycling plants.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

International Paper Co has a Value Score of 61, which is considered to be undervalued.

International Paper Co’s price-earnings ratio is 38.6 compared to the industry median at 11.4. This means that it has a higher price relative to its earnings compared to its peers. This makes International Paper Co less attractive for value investors.

International Paper Co’s price-to-book ratio is lower than its peers. This could make International Paper Co more attractive for value investors when compared to the industry median at 0.97.

You can read more about International Paper Co’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Paper Packaging Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Paper Packaging stocks as well as other industrys.

Choosing Which of the 3 Best Paper Packaging Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• DSS Inc stock has a Value Grade of A.
• Graphic Packaging Holding Company stock has a Value Grade of B.
• International Paper Co stock has a Value Grade of B.

Now that you have a bit more background about each of the 3 undervalued stocks in the Paper Packaging industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Paper Packaging Stocks

Want to learn more about Paper Packaging stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 3 Undervalued Paper Packaging Stocks for Wednesday, February 07
• What You Need to Know About International Paper Co's Q4 Earnings
• What You Need to Know About WestRock Co's Q1 Earnings
• Why International Paper Co’s (IP) Stock Is Down 4.10%

AAII Disclaimer

We make no representations or warranties that any investor will, or is likely to, achieve profits similar to those shown, because past, hypothetical or simulated performance is not necessarily indicative of future results. Before making an investment decision, you should consider your circumstances and whether the information on our content is applicable to your situation. This information was prepared in good faith and we accept no liability for any errors or omissions. The full disclaimer can be read here.