AEM or FNV: Which Is the Better Value Stock Right Now?
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Investors looking for stocks in the Mining - Gold sector might want to consider either Agnico Eagle Mines (AEM) or Franco-Nevada (FNV). 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Agnico Eagle Mines and Franco-Nevada are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that AEM has an improving earnings outlook. 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.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
AEM currently has a forward P/E ratio of 21.17, while FNV has a forward P/E of 38.66. We also note that AEM has a PEG ratio of 0.75. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. FNV currently has a PEG ratio of 21.01.
Another notable valuation metric for AEM is its P/B ratio of 2.06. 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, FNV has a P/B of 4.13.
These metrics, and several others, help AEM earn a Value grade of B, while FNV has been given a Value grade of F.
AEM sticks out from FNV in both our Zacks Rank and Style Scores models, so value investors will likely feel that AEM is the better option right now.
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Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report