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

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Investors interested in stocks from the Mining - Gold sector have probably already heard of Gold Fields (GFI - Free Report) 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.

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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, both Gold Fields and Agnico Eagle Mines are holding a Zacks Rank of # 1 (Strong Buy). 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 only part of the picture 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 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.

GFI currently has a forward P/E ratio of 14.13, while AEM has a forward P/E of 36.75. We also note that GFI has a PEG ratio of 0.44. 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 36.75.

Another notable valuation metric for GFI is its P/B ratio of 2.21. 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, AEM has a P/B of 2.96.

These metrics, and several others, help GFI earn a Value grade of A, while AEM has been given a Value grade of D.

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


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Agnico Eagle Mines Limited (AEM) - free report >>

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