Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of SSR Mining (SSRM) and Reliance (RS). But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Both SSR Mining and Reliance have a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one piece of the puzzle for value investors.
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.
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 a variety of other fundamentals that have been used by value investors for years.
SSRM currently has a forward P/E ratio of 7.32, while RS has a forward P/E of 19.06. We also note that SSRM has a PEG ratio of 0.41. 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. RS currently has a PEG ratio of 1.12.
Another notable valuation metric for SSRM is its P/B ratio of 1.53. 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, RS has a P/B of 2.59.
These are just a few of the metrics contributing to SSRM's Value grade of B and RS's Value grade of C.
Both SSRM and RS are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SSRM is the superior value option right now.
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Silver Standard Resources Inc. (SSRM): Free Stock Analysis Report
Reliance, Inc. (RS): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).