Mining – Investors looking for stocks in the diversified sector may want to consider Newmont Corporation (NEM) or Wheaton Precious Metals Corp (WPM). But which of these two stocks is more attractive to 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 involves adding an impressive grade to the Value category of our Style Score system along with a strong Zacks Rank. Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with distinctive traits.
Currently, Newmont Corporation has a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp has a Zacks Rank #3 (Hold). This means that NEM’s earnings estimate revision activity has been more impressive, so investors should feel comfortable with its analyst outlook improving. But it’s just one piece of the puzzle for value investors.
Value investors are also interested in several tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
Our value category highlights undervalued companies by looking at a variety of key metrics including the popular P/E ratio as well as the P/S ratio, earnings yield, cash flow per share, and many other fundamentals used. For years by value investors.
NEM currently has a P/E ratio of 17.25, while WPM’s forward P/E is 38.24. We also note that NEM’s PEG ratio is 1.70. 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. WPM currently has a PEG ratio of 7.65.
Another notable valuation metric for NEM is its P/B ratio of 1.71. P/B is a method of comparing a stock’s market price to its book value, which is defined as total assets minus total liabilities. By comparison, WPM’s P/B is 2.99.
These are some of the metrics that contribute to NEM’s Value grade of B and WPM’s Value grade of F.
NEM stands out above WPM due to its solid earnings outlook, and based on these valuation data, we also feel that NEM is the better value option right now.
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Newmont Corporation (NEM): Free Stock Analysis Report
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Jax Investment Research
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