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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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Teck Resources Ltd has a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that TECK likely has seen a stronger improvement to its earnings outlook than WPM has recently. 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.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

TECK currently has a forward P/E ratio of 5.94, while WPM has a forward P/E of 38.05. We also note that TECK has a PEG ratio of 1. 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 7.61.

Another notable valuation metric for TECK is its P/B ratio of 0.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, WPM has a P/B of 2.96.

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

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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