AUY vs. AEM: Which Stock Is the Better Value Option?
Investors looking for stocks in the Mining - Gold sector might want to consider either Yamana Gold (AUY) or 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
Yamana Gold and Agnico Eagle Mines are sporting Zacks Ranks of #2 (Buy) and #5 (Strong Sell), respectively, right now. Investors should feel comfortable knowing that AUY likely has seen a stronger improvement to its earnings outlook than AEM has recently. 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.
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.
AUY currently has a forward P/E ratio of 19.53, while AEM has a forward P/E of 31.61. We also note that AUY has a PEG ratio of 3.21. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. AEM currently has a PEG ratio of 31.61.
Another notable valuation metric for AUY is its P/B ratio of 1.08. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, AEM has a P/B of 1.45.
These metrics, and several others, help AUY earn a Value grade of B, while AEM has been given a Value grade of F.
AUY sticks out from AEM in both our Zacks Rank and Style Scores models, so value investors will likely feel that AUY is the better option right now.
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Yamana Gold Inc. (AUY) : Free Stock Analysis Report
Agnico Eagle Mines Limited (AEM) : Free Stock Analysis Report
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