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GOLD or RGLD: Which Is the Better Value Stock Right Now?

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Investors with an interest in Mining - Gold stocks have likely encountered both Barrick Gold (GOLD - Free Report) and Royal Gold (RGLD - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, both Barrick Gold and Royal Gold are sporting a Zacks Rank of # 2 (Buy). Investors should feel comfortable knowing that both of these stocks have an improving earnings outlook since the Zacks Rank favors companies that have witnessed positive analyst estimate revisions. But this is just one factor that value investors are interested in.

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.

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.

GOLD currently has a forward P/E ratio of 15.70, while RGLD has a forward P/E of 29.13. We also note that GOLD has a PEG ratio of 0.48. 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. RGLD currently has a PEG ratio of 1.10.

Another notable valuation metric for GOLD is its P/B ratio of 0.99. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, RGLD has a P/B of 3.07.

These metrics, and several others, help GOLD earn a Value grade of A, while RGLD has been given a Value grade of D.

Both GOLD and RGLD are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that GOLD is the superior value option right now.


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Barrick Gold Corporation (GOLD) - free report >>

Royal Gold, Inc. (RGLD) - free report >>

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