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IMPUY vs. WPM: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors looking for stocks in the Mining - Miscellaneous sector might want to consider either Impala Platinum Holdings Ltd. (IMPUY) 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.

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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Currently, Impala Platinum Holdings Ltd. has a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that IMPUY 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 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.

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The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

IMPUY currently has a forward P/E ratio of 4.57, while WPM has a forward P/E of 31.33. We also note that IMPUY has a PEG ratio of 0.65. 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 6.27.

Another notable valuation metric for IMPUY is its P/B ratio of 2.74. 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 3.65.

These are just a few of the metrics contributing to IMPUY's Value grade of A and WPM's Value grade of D.

IMPUY sticks out from WPM in both our Zacks Rank and Style Scores models, so value investors will likely feel that IMPUY is the better option right now.


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Impala Platinum Holdings Ltd. (IMPUY) : Free Stock Analysis Report
 
Wheaton Precious Metals Corp. (WPM) : Free Stock Analysis Report
 
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