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BTG vs. FNV: Which Stock Is the Better Value Option?

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Investors looking for stocks in the Mining - Gold sector might want to consider either B2Gold (BTG - Free Report) or 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, both B2Gold and Franco-Nevada are sporting a Zacks Rank of # 2 (Buy). 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.

BTG currently has a forward P/E ratio of 7.29, while FNV has a forward P/E of 44.87. We also note that BTG has a PEG ratio of 1.07. 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. FNV currently has a PEG ratio of 11.22.

Another notable valuation metric for BTG is its P/B ratio of 1.54. 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, FNV has a P/B of 3.72.

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

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


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