B vs. AGI: Which Stock Is the Better Value Option?

Investors interested in stocks from the Mining - Gold sector have probably already heard of Barrick Mining (B) and Alamos Gold (AGI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Barrick Mining has a Zacks Rank of #2 (Buy), while Alamos Gold has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that B likely has seen a stronger improvement to its earnings outlook than AGI has recently. 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.

B currently has a forward P/E ratio of 16.76, while AGI has a forward P/E of 22.93. We also note that B has a PEG ratio of 0.44. 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. AGI currently has a PEG ratio of 0.52.

Another notable valuation metric for B is its P/B ratio of 1.86. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, AGI has a P/B of 3.51.

These are just a few of the metrics contributing to B's Value grade of B and AGI's Value grade of C.

B stands above AGI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that B 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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