Investors looking for stocks in the Mining - Miscellaneous sector might want to consider either Glencore PLC (GLNCY) or Wheaton Precious Metals Corp. (WPM). 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.
Right now, Glencore PLC is sporting a Zacks Rank of #1 (Strong Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GLNCY likely has seen a stronger improvement to its earnings outlook than WPM has recently. 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.
GLNCY currently has a forward P/E ratio of 13.58, while WPM has a forward P/E of 29.13. We also note that GLNCY has a PEG ratio of 0.30. 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. WPM currently has a PEG ratio of 2.74.
Another notable valuation metric for GLNCY is its P/B ratio of 2.79. 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, WPM has a P/B of 6.99.
Based on these metrics and many more, GLNCY holds a Value grade of B, while WPM has a Value grade of F.
GLNCY stands above WPM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GLNCY is the superior value option right now.
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Glencore PLC (GLNCY): Free Stock Analysis Report
Wheaton Precious Metals Corp. (WPM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).