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NEM or RGLD: Which Is the Better Value Stock Right Now?
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Investors with an interest in Mining - Gold stocks have likely encountered both Newmont Corporation (NEM - Free Report) and Royal Gold (RGLD - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Newmont Corporation has a Zacks Rank of #1 (Strong Buy), while Royal Gold has a Zacks Rank of #3 (Hold). This means that NEM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
NEM currently has a forward P/E ratio of 12.52, while RGLD has a forward P/E of 24.74. We also note that NEM has a PEG ratio of 0.88. 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. RGLD currently has a PEG ratio of 1.30.
Another notable valuation metric for NEM is its P/B ratio of 1.85. 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, RGLD has a P/B of 3.60.
These are just a few of the metrics contributing to NEM's Value grade of A and RGLD's Value grade of D.
NEM 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 NEM is likely the superior value option right now.
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NEM or RGLD: Which Is the Better Value Stock Right Now?
Investors with an interest in Mining - Gold stocks have likely encountered both Newmont Corporation (NEM - Free Report) and Royal Gold (RGLD - 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.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, Newmont Corporation has a Zacks Rank of #1 (Strong Buy), while Royal Gold has a Zacks Rank of #3 (Hold). This means that NEM's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether 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.
NEM currently has a forward P/E ratio of 12.52, while RGLD has a forward P/E of 24.74. We also note that NEM has a PEG ratio of 0.88. 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. RGLD currently has a PEG ratio of 1.30.
Another notable valuation metric for NEM is its P/B ratio of 1.85. 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, RGLD has a P/B of 3.60.
These are just a few of the metrics contributing to NEM's Value grade of A and RGLD's Value grade of D.
NEM 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 NEM is likely the superior value option right now.