We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
GOLD vs. AEM: Which Stock Is the Better Value Option?
Read MoreHide Full Article
Investors interested in stocks from the Mining - Gold sector have probably already heard of Barrick Gold (GOLD - Free Report) and Agnico Eagle Mines (AEM - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Barrick Gold and Agnico Eagle Mines are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GOLD currently has a forward P/E ratio of 22.36, while AEM has a forward P/E of 26.90. We also note that GOLD has a PEG ratio of 11.18. 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. AEM currently has a PEG ratio of 26.90.
Another notable valuation metric for GOLD is its P/B ratio of 1.07. 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, AEM has a P/B of 1.60.
Based on these metrics and many more, GOLD holds a Value grade of B, while AEM has a Value grade of D.
Both GOLD and AEM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GOLD is the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
GOLD vs. AEM: Which Stock Is the Better Value Option?
Investors interested in stocks from the Mining - Gold sector have probably already heard of Barrick Gold (GOLD - Free Report) and Agnico Eagle Mines (AEM - 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Barrick Gold and Agnico Eagle Mines are both sporting a Zacks Rank of # 2 (Buy) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
GOLD currently has a forward P/E ratio of 22.36, while AEM has a forward P/E of 26.90. We also note that GOLD has a PEG ratio of 11.18. 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. AEM currently has a PEG ratio of 26.90.
Another notable valuation metric for GOLD is its P/B ratio of 1.07. 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, AEM has a P/B of 1.60.
Based on these metrics and many more, GOLD holds a Value grade of B, while AEM has a Value grade of D.
Both GOLD and AEM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GOLD is the superior value option right now.