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BTG vs. FNV: Which Stock Is the Better Value Option?

Zacks Equity Research

Investors looking for stocks in the Mining - Gold sector might want to consider either B2Gold (BTG) or Franco-Nevada (FNV). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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, B2Gold has a Zacks Rank of #1 (Strong Buy), while Franco-Nevada has a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BTG 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.

BTG currently has a forward P/E ratio of 11.22, while FNV has a forward P/E of 64.37. We also note that BTG has a PEG ratio of 0.69. 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. FNV currently has a PEG ratio of 16.09.

Another notable valuation metric for BTG is its P/B ratio of 2.64. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, FNV has a P/B of 5.35.

These are just a few of the metrics contributing to BTG's Value grade of B and FNV's Value grade of F.

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


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B2Gold Corp (BTG) : Free Stock Analysis Report
 
Franco-Nevada Corporation (FNV) : Free Stock Analysis Report
 
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