GFI or RGLD: Which Is the Better Value Stock Right Now?

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

Gold Fields Limited (GFI) is a stock many investors are watching right now. GFI is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with a P/E ratio of 8.21, which compares to its industry's average of 12.74. GFI's Forward P/E has been as high as 14.68 and as low as 6.76, with a median of 9.51, all within the past year.

We also note that GFI holds a PEG ratio of 0.31. 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. GFI's PEG compares to its industry's average PEG of 0.43. Over the past 52 weeks, GFI's PEG has been as high as 2.36 and as low as 0.28, with a median of 0.76.

Value investors will likely look at more than just these metrics, but the above data helps show that Gold Fields Limited is likely undervalued currently. And when considering the strength of its earnings outlook, GFI sticks out at as one of the market's strongest value stocks.

Zacks Investment Research

By Ian Walker

Gold Fields reported a sequential increase in gold production for the third quarter with rises in most of its key mines, and backed its full-year guidance.

The gold miner--one of the top producers worldwide--said Thursday that it produced 510,000 ounces of gold in the third quarter, compared with 454,000 ounces in the second quarter and 542,000 ounces in the same period last year.

The Johannesburg-based company reiterated that it expects gold production for the year to be at the lower end of the 2.05 million and 2.15 million ounces range guided for in August.

The company also expects all-in sustaining costs--a measure reflecting the full cost of gold mining--of between $1,580 and $1,670 an ounce.

AISC for the third quarter was $1,694 an ounce compared with $1,381 an ounce for the comparable period a year earlier and $1,751 an ounce in the second quarter.

Write to Ian Walker at ian.walker@wsj.com