Investors interested in mining gold stocks are likely to include both Barrick Gold (GOLD – Free Report) and Triple Flag Precious Metals (TFPM – Free report). But which of these two stocks offers value investors better bang for their buck right now? We need to take a closer look.
We’ve found that the best way to spot great opportunities is to pair a strong Zacks Rank with a good grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that focuses on companies with positive earnings estimate revision trends, while our Style Scores ensure that companies are rated based on specific characteristics.
Both Barrick Gold and Triple Flag Precious Metals currently have a Zacks Rank of #2 (Buy). This means that both companies have witnessed positive earnings estimate revisions. So investors should feel comfortable knowing that both stocks have improving earnings prospects. But this is just one factor that value investors are interested in.
Value investors also tend to look at some traditional, tried-and-true metrics to help them find stocks that they believe are undervalued at current share price levels.
Our value category rates stocks based on a number of key metrics, including the proven price-to-earnings ratio, price-to-earnings ratio, earnings yield, and cash flow per share, as well as a number of other fundamental factors that value investors often use.
GOLD currently has a forward price-to-earnings ratio of 15.70, while TFPM has a forward price-to-earnings ratio of 32.60. We also note that GOLD has a PEG ratio of 0.48. This metric is used in the same way as the famous price-to-earnings ratio, but the PEG ratio also takes into account the stock’s expected earnings growth. TFPM currently has a PEG ratio of 1.17.
Another notable valuation metric for GOLD is its price-to-earnings ratio of 1.09. The P/B ratio is used to compare a stock’s market value to its book value, which is defined as total assets minus total liabilities. For comparison, TFPM has a P/B of 2.11.
Based on these statistics and many more, GOLD has a value grade of A, while TFPM has a value grade of D.
Both GOLD and TFPM are impressive stocks with solid earnings prospects, but based on these valuation metrics, we believe GOLD is the superior value option right now.