HMY or FNV: Which Is the Better Value Stock Right Now?
Investors interested in Mining - Gold stocks are likely familiar with Harmony Gold (HMY) and Franco-Nevada (FNV). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Right now, Harmony Gold is sporting a Zacks Rank of #2 (Buy), while Franco-Nevada has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that HMY is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies 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.
HMY currently has a forward P/E ratio of 5.92, while FNV has a forward P/E of 60.07. We also note that HMY has a PEG ratio of 0.17. 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 15.02.
Another notable valuation metric for HMY is its P/B ratio of 1.86. 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, FNV has a P/B of 5.22.
Based on these metrics and many more, HMY holds a Value grade of B, while FNV has a Value grade of F.
HMY is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that HMY is likely the superior value option right now.
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Harmony Gold Mining Company Limited (HMY) : Free Stock Analysis Report
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
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