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 Wednesday, November 08, 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.

Ardagh Metal Packaging SA’s Value Grade

Value Grade:

Ardagh Metal Packaging S.A. is a Luxembourg based company that supplies consumer metal beverage cans. It supplies infinitely recyclable, metal beverage cans to brand owners. The Company deals with the multiple categories of products including beer, carbonated soft drinks, energy drinks, hard seltzers, juices, pre-mixed cocktails, teas, sparkling waters and wine. The Company operates approximately 23 production facilities in the Americas and Europe. The Company is also a suppliers of metal beverage can package solutions, capable of supplying multi-national, national and regional beverage producers. The Company's subsidiaries inlcude Ardagh Metal Packaging Holdings Sarl and Gores Holdings V, Inc.

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.

Ardagh Metal Packaging SA has a Value Score of 65, which is considered to be undervalued.

When you look at Ardagh Metal Packaging SA’s price-to-sales ratio at 0.45 compared to the industry median at 0.74, this company has a lower price relative to revenue compared to its peers. This could make Ardagh Metal Packaging SA’s stock more attractive for value investors.

Now, let’s assess Ardagh Metal Packaging SA’s EV/EBITDA ratio, also known as enterprise multiple. At 8.8, when compared to the industry median of 8.2, 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. Ardagh Metal Packaging SA’s shareholder yield is higher than its industry median ratio of 2.57%. 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. Ardagh Metal Packaging SA’s price-to-book ratio is higher than its industry median ratio of 2.52. This could make Ardagh Metal Packaging SA less attractive to investors looking for a new addition to their portfolio.

Berry Global Group Inc’s Value Grade

Value Grade:

Berry Global Group, Inc. creates packaging and engineered products. The Company operates through four segments: Consumer Packaging International, Consumer Packaging North America, Health, Hygiene & Specialties, and Engineered Materials. The Consumer Packaging International segment primarily consists of closures and dispensing systems, pharmaceutical devices and packaging, bottles and canisters, and containers. The Consumer Packaging North America segment primarily consists of containers and pails, foodservice, closures, bottles, prescription vials, and tubes. The Health, Hygiene & Specialties segment primarily consists of healthcare, hygiene, specialties, and tapes. The Engineered Materials segment primarily consists of stretch and shrink films, converter films, institutional can liners, food and consumer films, retail bags, and agricultural films. The Company partners with customers to develop, design, and manufacture products with a focus on the circular economy.

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.

Berry Global Group Inc has a Value Score of 81, which is considered to be undervalued.

Berry Global Group Inc’s price-earnings ratio is 10.7 compared to the industry median at 14.5. This means that it has a lower price relative to its earnings compared to its peers. This makes Berry Global Group Inc more attractive for value investors.

Berry Global Group Inc’s price-to-book ratio is higher than its peers. This could make Berry Global Group Inc less attractive for value investors when compared to the industry median at 2.52.

You can read more about Berry Global Group 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.

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 food service 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 and its storefronts on Amazon.com and Walmart.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 62, which is considered to be undervalued.

Karat Packaging Inc’s price-earnings ratio is 15.1 compared to the industry median at 14.5. This means that it has a higher price relative to its earnings compared to its peers. This makes Karat Packaging Inc less attractive for value investors.

Karat Packaging Inc’s price-to-book ratio is lower than its peers. This could make Karat Packaging Inc more attractive for value investors when compared to the industry median at 2.52.

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.

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.

• Ardagh Metal Packaging SA stock has a Value Grade of B.
• Berry Global Group Inc stock has a Value Grade of A.
• Karat Packaging Inc stock has a Value Grade of B.

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 Wednesday, November 08
• Why Core Molding Technologies, Inc.’s (CMT) Stock Is Down 31.10%
• Why Karat Packaging Inc’s (KRT) Stock Is Up 5.26%
• Why Myers Industries, Inc.’s (MYE) Stock Is Down 6.25%

AAII Disclaimer

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