Yahoo Finance NGD vs. AGI: Which Stock Is the Better Value Option?
Investors looking for stocks in the Mining - Gold sector might want to consider either New Gold (NGD) or Alamos Gold (AGI). 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 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, New Gold has a Zacks Rank of #1 (Strong Buy), while Alamos Gold has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that NGD 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.
NGD currently has a forward P/E ratio of 13.41, while AGI has a forward P/E of 22.38. We also note that NGD has a PEG ratio of 0.36. 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. AGI currently has a PEG ratio of 3.65.
Another notable valuation metric for NGD is its P/B ratio of 1.70. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, AGI has a P/B of 2.02.
These are just a few of the metrics contributing to NGD's Value grade of A and AGI's Value grade of D.
NGD stands above AGI thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NGD is the superior value option right now.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
New Gold Inc. (NGD) : Free Stock Analysis Report
Alamos Gold Inc. (AGI) : Free Stock Analysis Report
