Back to top

Image: Bigstock

AU or FNV: Which Is the Better Value Stock Right Now?

Read MoreHide Full Article

Investors interested in Mining - Gold stocks are likely familiar with AngloGold (AU - Free Report) and Franco-Nevada (FNV - Free Report) . 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, AngloGold has a Zacks Rank of #2 (Buy), while Franco-Nevada has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AU is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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.

AU currently has a forward P/E ratio of 14.46, while FNV has a forward P/E of 47.82. We also note that AU has a PEG ratio of 1.55. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. FNV currently has a PEG ratio of 11.95.

Another notable valuation metric for AU is its P/B ratio of 2.84. 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, FNV has a P/B of 4.69.

Based on these metrics and many more, AU holds a Value grade of B, while FNV has a Value grade of F.

AU stands above FNV thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AU is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


AngloGold Ashanti PLC (AU) - free report >>

Franco-Nevada Corporation (FNV) - free report >>

Published in