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

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Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of Teck Resources Ltd (TECK - Free Report) and Wheaton Precious Metals Corp. (WPM - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Teck Resources Ltd and Wheaton Precious Metals Corp. are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that TECK likely has seen a stronger improvement to its earnings outlook than WPM has recently. 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.

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.

TECK currently has a forward P/E ratio of 7.88, while WPM has a forward P/E of 25.04. We also note that TECK has a PEG ratio of 0.24. 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 5.01.

Another notable valuation metric for TECK is its P/B ratio of 0.76. 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 2.85.

These metrics, and several others, help TECK earn a Value grade of B, while WPM has been given a Value grade of D.

TECK 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 TECK is likely the superior value option right now.


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