KGC or FNV: Which Is the Better Value Stock Right Now?
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Investors interested in stocks from the Mining - Gold sector have probably already heard of Kinross Gold (KGC) and 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.
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.
Currently, both Kinross Gold and Franco-Nevada are holding a Zacks Rank of # 2 (Buy). 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 just one piece of the puzzle for value investors.
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.
Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
KGC currently has a forward P/E ratio of 16.06, while FNV has a forward P/E of 37.56. We also note that KGC has a PEG ratio of 0.54. 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. FNV currently has a PEG ratio of 20.41.
Another notable valuation metric for KGC is its P/B ratio of 1.75. 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 4.01.
These metrics, and several others, help KGC earn a Value grade of A, while FNV has been given a Value grade of F.
Both KGC and FNV are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KGC is the superior value option right now.
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Kinross Gold Corporation (KGC) : Free Stock Analysis Report
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report