Investors looking for stocks in the Mining - Gold sector might want to consider either Kinross Gold (KGC) or 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Kinross Gold is sporting a Zacks Rank of #1 (Strong Buy), while Franco-Nevada has a Zacks Rank of #2 (Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that KGC has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.
KGC currently has a forward P/E ratio of 14.86, while FNV has a forward P/E of 37.01. We also note that KGC has a PEG ratio of 0.42. 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. FNV currently has a PEG ratio of 1.71.
Another notable valuation metric for KGC is its P/B ratio of 3.63. 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, FNV has a P/B of 5.23.
Based on these metrics and many more, KGC holds a Value grade of B, while FNV has a Value grade of D.
KGC has seen stronger estimate revision activity and sports more attractive valuation metrics than FNV, so it seems like value investors will conclude that KGC is the superior option right now.
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Kinross Gold Corporation (KGC): Free Stock Analysis Report Franco-Nevada Corporation (FNV): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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