AUY vs. AGI: 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 Alamos Gold (AGI). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Yamana Gold has a Zacks Rank of #2 (Buy), while Alamos Gold has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that AUY likely has seen a stronger improvement to its earnings outlook than AGI has recently. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
AUY currently has a forward P/E ratio of 18.20, while AGI has a forward P/E of 25.48. We also note that AUY has a PEG ratio of 2.99. 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. AGI currently has a PEG ratio of 3.22.
Another notable valuation metric for AUY is its P/B ratio of 1.01. 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, AGI has a P/B of 1.52.
These are just a few of the metrics contributing to AUY's Value grade of B and AGI's Value grade of D.
AUY stands above AGI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that AUY is the superior value option right now.
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Yamana Gold Inc. (AUY) : Free Stock Analysis Report
Alamos Gold Inc. (AGI) : Free Stock Analysis Report
