Investors with an interest in Mining – Miscellaneous stocks have likely encountered both Teck Resources Ltd (TECK) and HudBay Minerals (HBM). 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 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, Teck Resources Ltd has a Zacks Rank of #2 (Buy), while HudBay Minerals 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 TECK 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
TECK currently has a forward P/E ratio of 12.35, while HBM has a forward P/E of 37.41. We also note that TECK has a PEG ratio of 0.54. 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. HBM currently has a PEG ratio of 1.60.
Another notable valuation metric for TECK is its P/B ratio of 0.74. 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, HBM has a P/B of 1.19.
These are just a few of the metrics contributing to TECK’s Value grade of A and HBM’s Value grade of C.
TECK sticks out from HBM in both our Zacks Rank and Style Scores models, so value investors will likely feel that TECK is the better option right now.
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