Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of HudBay Minerals (HBM) and Wheaton Precious Metals Corp. (WPM). 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both HudBay Minerals and Wheaton Precious Metals Corp. are holding a Zacks Rank of #1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
HBM currently has a forward P/E ratio of 15.56, while WPM has a forward P/E of 41.04. We also note that HBM has a PEG ratio of 0.30. 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. WPM currently has a PEG ratio of 2.66.
Another notable valuation metric for HBM is its P/B ratio of 1.52. 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, WPM has a P/B of 5.31.
These metrics, and several others, help HBM earn a Value grade of A, while WPM has been given a Value grade of F.
Both HBM and WPM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that HBM is the superior value option right now.
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HudBay Minerals Inc (HBM): Free Stock Analysis Report Wheaton Precious Metals Corp. (WPM): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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