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 Non-Paper Containers & 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.

Why Focus on Undervalued Non-Paper Containers & 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 Non-Paper Containers & 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 Non-Paper Containers & Packaging industry for Thursday, January 19, 2023. Let’s take a closer look at their individual scores to see how they measure up against each other and the Non-Paper Containers & 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.

Crown Holdings, Inc.’s Value Grade

Value Grade:

Crown Holdings, Inc. is engaged in the design, manufacture, and sale of packaging products for consumer goods and industrial products. Its packaging for industrial products includes steel and plastic consumables and equipment, paper-based protective packaging, and plastic film consumables and equipment. It operates under various segments: Americas Beverage, European Beverage, Asia Pacific and Transit Packaging. Americas Beverage segment manufactures aluminum beverage cans and ends, glass bottles, steel crowns and aluminum caps. European Beverage segment manufactures aluminum beverage cans and ends in Europe, the Middle East and North Africa. Asia Pacific segment consists of beverage can operations in Cambodia, China, Indonesia, Malaysia, Myanmar, Singapore, Thailand and Vietnam and also includes non-beverage can operations, primarily food cans and specialty packaging. Its Transit Packaging segment includes its industrial and protective solutions and equipment and tools businesses.

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.

Crown Holdings, Inc. has a Value Score of 61, which is considered to be undervalued.

When you look at Crown Holdings, Inc.’s price-to-sales ratio at 0.80 compared to the industry median at 0.74, this company has a higher price relative to revenue compared to its peers. This could make Crown Holdings, Inc.’s stock less attractive for value investors.

Now, let’s assess Crown Holdings, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 9.2, when compared to the industry median of 8.7, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

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. Crown Holdings, Inc.’s shareholder yield is higher than its industry median ratio of 3.27%. 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. Crown Holdings, Inc.’s price-to-book ratio is higher than its industry median ratio of 2.89. This could make Crown Holdings, Inc. less attractive to investors looking for a new addition to their portfolio.

Karat Packaging Inc’s Value Grade

Value Grade:

Karat Packaging Inc. is a specialty distributor and manufacturer of disposable foodservice products and related items. The Company supplies a range of products for the foodservice industry, including food and take-out containers, bags, tableware, cups, lids, cutlery, straws, specialty beverage ingredients, equipment, gloves and other products. Its products are available in plastic, paper, biopolymer-based and other compostable forms. Its Karat Earth line includes food containers, tableware, cups, lids, utensils and straws. The Company offers customized solutions to its customers, including new product development, design, printing and logistics services. The Company's customers include a variety of national and regional distributors, restaurant chains, retail establishments and online customers. Its customers can order and schedule delivery of products via telephone, facsimile, email or through its online e-commerce platform at www.lollicupstore.com.

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.

Karat Packaging Inc has a Value Score of 61, which is considered to be undervalued.

Karat Packaging Inc’s price-earnings ratio is 11.7 compared to the industry median at 14.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Karat Packaging Inc more attractive for value investors.

Karat Packaging Inc’s price-to-book ratio is higher than its peers. This could make Karat Packaging Inc less attractive for value investors when compared to the industry median at 2.89.

You can read more about Karat Packaging Inc’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.

Veritiv Corp’s Value Grade

Value Grade:

Veritiv Corporation is a business-to-business provider of packaging and hygiene products and services, as well as print and publishing products, and logistics and supply chain management solutions. The Company operates through four reportable segments: Packaging, Facility Solutions, Print, and Publishing and Print Management (Publishing). The Packaging segment provides custom and standard packaging solutions for customers based in North America and in global markets. The Facility Solutions segment sources and sells cleaning, break-room and other supplies, such as towels and tissues, food service, personal protective equipment, cleaning chemicals, and skincare, primarily in United States and Mexico. The Print segment sells and distributes commercial printing, writing, copying, digital, specialty products and graphics consumables. The Publishing segment sells and distributes coated and uncoated commercial printing papers to publishers, retailers, converters and specialty businesses.

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.

Veritiv Corp has a Value Score of 92, which is considered to be undervalued.

Veritiv Corp’s price-earnings ratio is 5.6 compared to the industry median at 14.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Veritiv Corp more attractive for value investors.

Veritiv Corp’s price-to-book ratio is higher than its peers. This could make Veritiv Corp less attractive for value investors when compared to the industry median at 2.89.

You can read more about Veritiv Corp’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 Non-Paper Containers & 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 Non-Paper Containers & Packaging stocks as well as other industrys.

Choosing Which of the 3 Best Non-Paper Containers & 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.

• Crown Holdings, Inc. stock has a Value Grade of B.
• Karat Packaging Inc stock has a Value Grade of B.
• Veritiv Corp stock has a Value Grade of A.

Now that you have a bit more background about each of the 3 undervalued stocks in the Non-Paper Containers & 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 Non-Paper Containers & Packaging Stocks

Want to learn more about Non-Paper Containers & 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 Non-Paper Containers & Packaging Stocks for Thursday, January 19
• 3 Undervalued Non-Paper Containers & Packaging Stocks for Monday, January 09
• 3 Undervalued Non-Paper Containers & Packaging Stocks for Friday, January 06
• 3 Undervalued Non-Paper Containers & Packaging Stocks for Thursday, January 05

AAII Disclaimer

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