Investors with an interest in Mining - Miscellaneous stocks have likely encountered both Norsk Hydro ASA (NHYDY) and Wheaton Precious Metals Corp. (WPM). 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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Norsk Hydro ASA and Wheaton Precious Metals Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NHYDY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
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.
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.
NHYDY currently has a forward P/E ratio of 11.87, while WPM has a forward P/E of 38.99. We also note that NHYDY has a PEG ratio of 0.30. 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. WPM currently has a PEG ratio of 2.53.
Another notable valuation metric for NHYDY is its P/B ratio of 1.2. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, WPM has a P/B of 5.35.
These are just a few of the metrics contributing to NHYDY's Value grade of A and WPM's Value grade of F.
NHYDY has seen stronger estimate revision activity and sports more attractive valuation metrics than WPM, so it seems like value investors will conclude that NHYDY is the superior option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Norsk Hydro ASA (NHYDY): Free Stock Analysis Report Wheaton Precious Metals Corp. (WPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
