Back to top

Image: Bigstock

LUNMF vs. SCCO: Which Stock Is the Better Value Option?

Read MoreHide Full Article

Investors looking for stocks in the Mining - Non Ferrous sector might want to consider either Lundin Mining (LUNMF - Free Report) or Southern Copper (SCCO - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.

Lundin Mining and Southern Copper are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that LUNMF is likely seeing its earnings outlook improve to a greater extent. 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.

LUNMF currently has a forward P/E ratio of 15.38, while SCCO has a forward P/E of 31.01. We also note that LUNMF has a PEG ratio of 0.76. 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. SCCO currently has a PEG ratio of 2.77.

Another notable valuation metric for LUNMF is its P/B ratio of 1.48. 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, SCCO has a P/B of 12.62.

These are just a few of the metrics contributing to LUNMF's Value grade of B and SCCO's Value grade of D.

LUNMF 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 LUNMF is likely the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Southern Copper Corporation (SCCO) - free report >>

Lundin Mining Corp. (LUNMF) - free report >>

Published in