Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of Norsk Hydro ASA (NHYDY) and Wheaton Precious Metals Corp. (WPM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Norsk Hydro ASA and Wheaton Precious Metals Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that NHYDY likely has seen a stronger improvement to its earnings outlook than WPM has recently. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
NHYDY currently has a forward P/E ratio of 12.16, while WPM has a forward P/E of 44.69. We also note that NHYDY has a PEG ratio of 0.31. 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 2.90.
Another notable valuation metric for NHYDY is its P/B ratio of 1.28. 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, WPM has a P/B of 6.31.
Based on these metrics and many more, NHYDY holds a Value grade of A, while WPM has a Value grade of F.
NHYDY sticks out from WPM in both our Zacks Rank and Style Scores models, so value investors will likely feel that NHYDY is the better option right now.
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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).
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