Investors interested in Mining - Gold stocks are likely familiar with Iamgold (IAG) and Triple Flag Precious Metals (TFPM). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Iamgold has a Zacks Rank of #2 (Buy), while Triple Flag Precious Metals has a Zacks Rank of #3 (Hold). This means that IAG's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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 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.
IAG currently has a forward P/E ratio of 10.38, while TFPM has a forward P/E of 27.86. We also note that IAG has a PEG ratio of 0.26. 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. TFPM currently has a PEG ratio of 1.00.
Another notable valuation metric for IAG is its P/B ratio of 3.61. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TFPM has a P/B of 3.89.
Based on these metrics and many more, IAG holds a Value grade of B, while TFPM has a Value grade of D.
IAG has seen stronger estimate revision activity and sports more attractive valuation metrics than TFPM, so it seems like value investors will conclude that IAG is the superior option right now.
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Iamgold Corporation (IAG): Free Stock Analysis Report Triple Flag Precious Metals Corp. (TFPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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