Investors interested in Mining - Non Ferrous stocks are likely familiar with Lundin Mining (LUNMF) and Southern Copper (SCCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. 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.
Right now, both Lundin Mining and Southern Copper are sporting a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
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.
LUNMF currently has a forward P/E ratio of 25.26, while SCCO has a forward P/E of 25.82. We also note that LUNMF has a PEG ratio of 0.60. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SCCO currently has a PEG ratio of 1.21.
Another notable valuation metric for LUNMF is its P/B ratio of 1.84. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, SCCO has a P/B of 10.35.
Based on these metrics and many more, LUNMF holds a Value grade of B, while SCCO has a Value grade of C.
Both LUNMF and SCCO are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that LUNMF is the superior value option right now.
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Lundin Mining Corp. (LUNMF): Free Stock Analysis Report Southern Copper Corporation (SCCO): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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