TECK vs. WPM: Which Stock Should Value Investors Buy Now?

Investors interested in Mining – Miscellaneous stocks are likely familiar with Teck Resources Ltd (TECK) and Wheaton Precious Metals Corp. (WPM). But which of these two companies is the best option for those looking for undervalued stocks? 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Right now, Teck Resources Ltd is sporting a Zacks Rank of #1 (Strong Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TECK has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

TECK currently has a forward P/E ratio of 9.05, while WPM has a forward P/E of 27.91. We also note that TECK has a PEG ratio of 0.28. 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. WPM currently has a PEG ratio of 5.58.

Another notable valuation metric for TECK is its P/B ratio of 0.89. 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, WPM has a P/B of 3.11.

Based on these metrics and many more, TECK holds a Value grade of B, while WPM has a Value grade of D.

TECK has seen stronger estimate revision activity and sports more attractive valuation metrics than WPM, so it seems like value investors will conclude that TECK is the superior option right now.


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