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BHP or WPM: Which Is the Better Value Stock Right Now?

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Investors with an interest in Mining - Miscellaneous stocks have likely encountered both BHP (BHP - Free Report) and Wheaton Precious Metals Corp. (WPM - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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.

BHP has a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that BHP likely has seen a stronger improvement to its earnings outlook than WPM has recently. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

BHP currently has a forward P/E ratio of 10.29, while WPM has a forward P/E of 33.35. We also note that BHP has a PEG ratio of 3.43. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. WPM currently has a PEG ratio of 6.67.

Another notable valuation metric for BHP is its P/B ratio of 1.85. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WPM has a P/B of 2.69.

These are just a few of the metrics contributing to BHP's Value grade of A and WPM's Value grade of D.

BHP is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that BHP is likely the superior value option right now.


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BHP Group Limited Sponsored ADR (BHP) - free report >>

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