Investors interested in stocks from the Mining - Gold sector have probably already heard of Centerra Gold Inc. (CGAU) and Agnico Eagle Mines (AEM). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both Centerra Gold Inc. and Agnico Eagle Mines have a Zacks Rank of #1 (Strong Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
CGAU currently has a forward P/E ratio of 14.27, while AEM has a forward P/E of 21.09. We also note that CGAU has a PEG ratio of 0.52. 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. AEM currently has a PEG ratio of 0.60.
Another notable valuation metric for CGAU is its P/B ratio of 1.44. 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, AEM has a P/B of 3.51.
These are just a few of the metrics contributing to CGAU's Value grade of A and AEM's Value grade of C.
Both CGAU and AEM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CGAU is the superior value option right now.
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Centerra Gold Inc. (CGAU): Free Stock Analysis Report Agnico Eagle Mines Limited (AEM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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