Back to top

Image: Bigstock

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

Read MoreHide Full Article

Investors with an interest in Mining - Miscellaneous stocks have likely encountered both SSR Mining (SSRM - Free Report) and Wheaton Precious Metals Corp. (WPM - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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, SSR Mining has a Zacks Rank of #2 (Buy), while Wheaton Precious Metals Corp. has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that SSRM likely has seen a stronger improvement to its earnings outlook than WPM has recently. However, value investors will care about much more than just this.

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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

SSRM currently has a forward P/E ratio of 8.51, while WPM has a forward P/E of 42.86. We also note that SSRM has a PEG ratio of 0.48. 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 2.21.

Another notable valuation metric for SSRM is its P/B ratio of 0.25. 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, WPM has a P/B of 3.78.

These metrics, and several others, help SSRM earn a Value grade of A, while WPM has been given a Value grade of F.

SSRM stands above WPM thanks to its solid earnings outlook, and based on these valuation figures, we also feel that SSRM is the superior value option right now.


See More Zacks Research for These Tickers


Normally $25 each - click below to receive one report FREE:


Silver Standard Resources Inc. (SSRM) - free report >>

Wheaton Precious Metals Corp. (WPM) - free report >>

Published in