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EGO 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 Eldorado Gold Corporation (EGO - Free Report) or Franco-Nevada (FNV - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, Eldorado Gold Corporation is sporting a Zacks Rank of #2 (Buy), while Franco-Nevada has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that EGO likely has seen a stronger improvement to its earnings outlook than FNV has recently. 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.

EGO currently has a forward P/E ratio of 13.95, while FNV has a forward P/E of 41.16. We also note that EGO has a PEG ratio of 2.79. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. FNV currently has a PEG ratio of 10.29.

Another notable valuation metric for EGO is its P/B ratio of 0.47. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, FNV has a P/B of 4.54.

Based on these metrics and many more, EGO holds a Value grade of A, while FNV has a Value grade of D.

EGO sticks out from FNV in both our Zacks Rank and Style Scores models, so value investors will likely feel that EGO is the better option right now.


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

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