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AGI vs. GOLD: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Mining - Gold sector have probably already heard of Alamos Gold (AGI - Free Report) and Barrick Gold (GOLD - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great 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.

Both Alamos Gold and Barrick Gold have a Zacks Rank of # 2 (Buy) right now. Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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 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.

AGI currently has a forward P/E ratio of 25.92, while GOLD has a forward P/E of 30.57. We also note that AGI has a PEG ratio of 1.07. 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. GOLD currently has a PEG ratio of 15.29.

Another notable valuation metric for AGI is its P/B ratio of 1.21. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, GOLD has a P/B of 1.58.

Based on these metrics and many more, AGI holds a Value grade of B, while GOLD has a Value grade of C.

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


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