LUNMF vs. SCCO: Which Stock Should Value Investors Buy Now?
Investors interested in Mining - Non Ferrous stocks are likely familiar with Lundin Mining (LUNMF) and Southern Copper (SCCO). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Right now, Lundin Mining is sporting a Zacks Rank of #2 (Buy), while Southern Copper has a Zacks Rank of #3 (Hold). This means that LUNMF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
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.
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.
LUNMF currently has a forward P/E ratio of 9.80, while SCCO has a forward P/E of 18.37. We also note that LUNMF has a PEG ratio of 3.18. 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. SCCO currently has a PEG ratio of 15.31.
Another notable valuation metric for LUNMF is its P/B ratio of 1.07. 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, SCCO has a P/B of 6.51.
Based on these metrics and many more, LUNMF holds a Value grade of B, while SCCO has a Value grade of D.
LUNMF stands above SCCO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LUNMF is the superior value option right now.
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Lundin Mining Corp. (LUNMF) : Free Stock Analysis Report
Southern Copper Corporation (SCCO) : Free Stock Analysis Report
