AU or FNV: Which Is the Better Value Stock Right Now?

Investors with an interest in Mining - Gold stocks have likely encountered both AngloGold (AU) and Franco-Nevada (FNV). 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.

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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

AngloGold and Franco-Nevada are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that AU is likely seeing its earnings outlook improve to a greater extent. But this is only part of the picture 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.

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.

AU currently has a forward P/E ratio of 16.50, while FNV has a forward P/E of 66.56. We also note that AU has a PEG ratio of 0.75. 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. FNV currently has a PEG ratio of 16.64.

Another notable valuation metric for AU is its P/B ratio of 4.90. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, FNV has a P/B of 5.60.

These metrics, and several others, help AU earn a Value grade of A, while FNV has been given a Value grade of F.

AU has seen stronger estimate revision activity and sports more attractive valuation metrics than FNV, so it seems like value investors will conclude that AU is the superior option right now.

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AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
 
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
 
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