Dj Royal Gold Inc, Inst Holders, 3Q 2024 (Rgld)

Investors with an interest in Mining - Gold stocks have likely encountered both Gold Fields (GFI) 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.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive 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.

Gold Fields and Royal Gold are sporting Zacks Ranks of #1 (Strong Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that GFI likely has seen a stronger improvement to its earnings outlook than RGLD has recently. 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 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.

GFI currently has a forward P/E ratio of 13.58, while RGLD has a forward P/E of 28.89. We also note that GFI has a PEG ratio of 0.48. 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. RGLD currently has a PEG ratio of 1.19.

Another notable valuation metric for GFI is its P/B ratio of 2.81. 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, RGLD has a P/B of 3.19.

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

GFI stands above RGLD thanks to its solid earnings outlook, and based on these valuation figures, we also feel that GFI is the superior value option right now.

Zacks Investment Research