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RIO vs. MP: Which Stock Is the Better Value Option?
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Investors looking for stocks in the Mining - Miscellaneous sector might want to consider either Rio Tinto (RIO - Free Report) or MP Materials Corp. (MP - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Rio Tinto is sporting a Zacks Rank of #2 (Buy), while MP Materials Corp. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RIO has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
RIO currently has a forward P/E ratio of 9.70, while MP has a forward P/E of 41.90. We also note that RIO has a PEG ratio of 0.55. 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. MP currently has a PEG ratio of 2.58.
Another notable valuation metric for RIO is its P/B ratio of 1.65. 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, MP has a P/B of 2.11.
These are just a few of the metrics contributing to RIO's Value grade of A and MP's Value grade of D.
RIO 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 RIO is likely the superior value option right now.
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RIO vs. MP: Which Stock Is the Better Value Option?
Investors looking for stocks in the Mining - Miscellaneous sector might want to consider either Rio Tinto (RIO - Free Report) or MP Materials Corp. (MP - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Rio Tinto is sporting a Zacks Rank of #2 (Buy), while MP Materials Corp. has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that RIO has an improving earnings outlook. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.
RIO currently has a forward P/E ratio of 9.70, while MP has a forward P/E of 41.90. We also note that RIO has a PEG ratio of 0.55. 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. MP currently has a PEG ratio of 2.58.
Another notable valuation metric for RIO is its P/B ratio of 1.65. 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, MP has a P/B of 2.11.
These are just a few of the metrics contributing to RIO's Value grade of A and MP's Value grade of D.
RIO 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 RIO is likely the superior value option right now.