Investors interested in Mining – Gold stocks are likely familiar with Iamgold (IAG) and Agnico Eagle Mines (AEM). 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, Iamgold is sporting a Zacks Rank of #2 (Buy), while Agnico Eagle Mines has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that IAG has an improving earnings outlook. 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.
IAG currently has a forward P/E ratio of 16.36, while AEM has a forward P/E of 18.98. We also note that IAG has a PEG ratio of 5.45. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company’s expected earnings growth rate. AEM currently has a PEG ratio of 18.98.
Another notable valuation metric for IAG is its P/B ratio of 0.29. 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, AEM has a P/B of 1.20.
These metrics, and several others, help IAG earn a Value grade of A, while AEM has been given a Value grade of C.
IAG sticks out from AEM in both our Zacks Rank and Style Scores models, so value investors will likely feel that IAG is the better option right now.
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