Investors with an interest in Mining - Gold stocks have likely encountered both Alamos Gold (AGI) and Barrick Gold (GOLD). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Alamos Gold and Barrick Gold are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. 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.
AGI currently has a forward P/E ratio of 28.13, while GOLD has a forward P/E of 33.47. We also note that AGI has a PEG ratio of 1.25. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. GOLD currently has a PEG ratio of 16.74.
Another notable valuation metric for AGI is its P/B ratio of 1.56. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, GOLD has a P/B of 1.75.
Based on these metrics and many more, AGI holds a Value grade of B, while GOLD has a Value grade of D.
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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Alamos Gold Inc. (AGI) : Free Stock Analysis Report
Barrick Gold Corporation (GOLD) : Free Stock Analysis Report
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