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SBGL vs. AEM: Which Stock Is the Better Value Option?

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Investors interested in Mining - Gold stocks are likely familiar with Sibanye Gold Limited and Agnico Eagle Mines (AEM - 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.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Right now, both Sibanye Gold Limited and Agnico Eagle Mines are sporting a Zacks Rank of # 2 (Buy). 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. However, value investors will care about much more than just this.

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 Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

SBGL currently has a forward P/E ratio of 17.89, while AEM has a forward P/E of 71.67. We also note that SBGL 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. AEM currently has a PEG ratio of 71.67.

Another notable valuation metric for SBGL is its P/B ratio of 1.23. 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, AEM has a P/B of 2.92.

These are just a few of the metrics contributing to SBGL's Value grade of A and AEM's Value grade of D.

Both SBGL and AEM are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SBGL is the superior value option right now.


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