Investors with an interest in Mining - Gold stocks have likely encountered both Eldorado Gold Corporation (EGO) 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Eldorado Gold Corporation and Triple Flag Precious Metals are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that EGO is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
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.
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.
EGO currently has a forward P/E ratio of 13.15, while TFPM has a forward P/E of 31.98. We also note that EGO has a PEG ratio of 0.39. 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 1.25.
Another notable valuation metric for EGO is its P/B ratio of 1.11. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TFPM has a P/B of 2.82.
These are just a few of the metrics contributing to EGO's Value grade of A and TFPM's Value grade of D.
EGO sticks out from TFPM in both our Zacks Rank and Style Scores models, so value investors will likely feel that EGO is the better option right now.
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Eldorado Gold Corporation (EGO): 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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