HMY or FNV: Which Is the Better Value Stock Right Now?

Investors interested in Mining - Gold stocks are likely familiar with Harmony Gold (HMY) and Franco-Nevada (FNV). 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.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Harmony Gold and Franco-Nevada are both sporting a Zacks Rank of #1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.

HMY currently has a forward P/E ratio of 5.27, while FNV has a forward P/E of 33.83. We also note that HMY has a PEG ratio of 0.09. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FNV currently has a PEG ratio of 2.14.

Another notable valuation metric for HMY is its P/B ratio of 3.71. 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, FNV has a P/B of 4.91.

These are just a few of the metrics contributing to HMY's Value grade of B and FNV's Value grade of F.

Both HMY and FNV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HMY is the superior value option right now.

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This article originally published on Zacks Investment Research (zacks.com).

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