Investors with an interest in Mining - Gold stocks have likely encountered both Gold Fields (GFI) and 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.

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 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, Gold Fields has a Zacks Rank of #1 (Strong Buy), while Franco-Nevada has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that GFI likely has seen a stronger improvement to its earnings outlook than FNV has recently. But this is only part of the picture 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 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.

GFI currently has a forward P/E ratio of 9.49, while FNV has a forward P/E of 34.54. We also note that GFI has a PEG ratio of 0.29. 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 9.57.

Another notable valuation metric for GFI is its P/B ratio of 3.48. 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 4.46.

These metrics, and several others, help GFI earn a Value grade of B, while FNV has been given a Value grade of F.

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

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Gold Fields Limited (GFI) : Free Stock Analysis Report

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

This article originally published on Zacks Investment Research (zacks.com).

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