CGAU vs. TFPM: Which Stock Is the Better Value Option?

Investors interested in Mining - Gold stocks are likely familiar with Centerra Gold Inc. (CGAU) and Triple Flag Precious Metals (TFPM). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Centerra Gold Inc. and Triple Flag Precious Metals are both sporting a Zacks Rank of #1 (Strong Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. However, value investors will care about much more than just this.

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.

CGAU currently has a forward P/E ratio of 10.83, while TFPM has a forward P/E of 27.61. We also note that CGAU has a PEG ratio of 0.94. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. TFPM currently has a PEG ratio of 2.00.

Another notable valuation metric for CGAU is its P/B ratio of 1.82. 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, TFPM has a P/B of 3.91.

These are just a few of the metrics contributing to CGAU's Value grade of B and TFPM's Value grade of F.

Both CGAU and TFPM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that CGAU is the superior value option right now.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research