Investors interested in stocks from the Mining - Non Ferrous sector have probably already heard of Lundin Mining (LUNMF) and Southern Copper (SCCO). 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.
Currently, Lundin Mining has a Zacks Rank of #2 (Buy), while Southern Copper 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 LUNMF is likely seeing its earnings outlook improve to a greater extent. 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.
LUNMF currently has a forward P/E ratio of 18.48, while SCCO has a forward P/E of 23.95. We also note that LUNMF has a PEG ratio of 1.01. 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. SCCO currently has a PEG ratio of 1.57.
Another notable valuation metric for LUNMF is its P/B ratio of 2.57. 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, SCCO has a P/B of 12.73.
These metrics, and several others, help LUNMF earn a Value grade of B, while SCCO has been given a Value grade of D.
LUNMF stands above SCCO thanks to its solid earnings outlook, and based on these valuation figures, we also feel that LUNMF is the superior value option right now.
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See Stocks Now >>Lundin Mining Corp. (LUNMF) : Free Stock Analysis Report
Southern Copper Corporation (SCCO) : Free Stock Analysis Report
This article originally published on Zacks Investment Research (zacks.com).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
