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BTG vs. FNV: Which Stock Should Value Investors Buy Now?

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 stocks is more attractive to value investors? We'll need to take a closer look to find out.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, B2Gold is sporting a Zacks Rank of #2 (Buy), while Franco-Nevada 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 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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.

BTG currently has a forward P/E ratio of 12.38, while FNV has a forward P/E of 67.35. We also note that BTG has a PEG ratio of 0.76. 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. FNV currently has a PEG ratio of 16.84.

Another notable valuation metric for BTG is its P/B ratio of 2.67. 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, FNV has a P/B of 5.73.

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

BTG sticks out from FNV in both our Zacks Rank and Style Scores models, so value investors will likely feel that BTG is the better option right now.


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B2Gold Corp (BTG) : Free Stock Analysis Report
 
FrancoNevada Corporation (FNV) : Free Stock Analysis Report
 
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