Yahoo Finance AU vs. RGLD: Which Stock Is the Better Value Option?
Investors interested in Mining - Gold stocks are likely familiar with AngloGold (AU) and Royal Gold (RGLD). But which of these two stocks presents investors with the better value opportunity right now? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Currently, both AngloGold and Royal Gold are holding a Zacks Rank of # 2 (Buy). 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 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 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.
AU currently has a forward P/E ratio of 12.04, while RGLD has a forward P/E of 33.10. We also note that AU has a PEG ratio of 3.03. 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. RGLD currently has a PEG ratio of 3.31.
Another notable valuation metric for AU is its P/B ratio of 2.16. 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, RGLD has a P/B of 2.96.
Based on these metrics and many more, AU holds a Value grade of B, while RGLD has a Value grade of F.
Both AU and RGLD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AU is the superior value option right now.
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AngloGold Ashanti Limited (AU) : Free Stock Analysis Report
Royal Gold, Inc. (RGLD) : Free Stock Analysis Report
