Investors interested in stocks from the Mining - Miscellaneous sector have probably already heard of Teck Resources Ltd (TECK) and Wheaton Precious Metals Corp. (WPM). But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
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 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, Teck Resources Ltd is sporting a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that TECK likely has seen a stronger improvement to its earnings outlook than WPM has recently. But this is just one piece of the puzzle for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
TECK currently has a forward P/E ratio of 13.77, while WPM has a forward P/E of 25.37. We also note that TECK has a PEG ratio of 1.89. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. WPM currently has a PEG ratio of 2.27.
Another notable valuation metric for TECK is its P/B ratio of 1.42. 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, WPM has a P/B of 5.46.
These metrics, and several others, help TECK earn a Value grade of B, while WPM has been given a Value grade of F.
TECK sticks out from WPM in both our Zacks Rank and Style Scores models, so value investors will likely feel that TECK is the better option right now.
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Teck Resources Ltd (TECK): Free Stock Analysis Report
Wheaton Precious Metals Corp. (WPM): Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).