Why AU Could Outperform Agnico Eagle Mines Stock
AU is Agnico Eagle Mines’s peer in Gold industry that has:
1) Lower valuation (P/OpInc) compared to Agnico Eagle Mines stock
2) But higher revenue and operating income growth
This disconnect between valuation and performance could mean that you are better off buying AU stock vs. AEM stock
Instead of stock picking, it makes more sense to build a portfolio that is designed to win across cycles. Our numbers show that High Quality Portfolio has turned stock-picking uncertainty into market-beating consistency.
Key Metrics Compared
| Metric | AEM | AU |
|---|---|---|
| P/OpInc* | 15.2x | 14.4x |
| LTM OpInc Growth | 95.8% | 213.8% |
| 3Y Avg OpInc Growth | 60.2% | 73.1% |
| LTM Revenue Growth | 35.2% | 54.6% |
| 3Y Avg Revenue Growth | 26.0% | 26.4% |
OpInc = Operating Income, P/OpInc = Price To Operating Income Ratio
But do these numbers tell the full story? Read Buy or Sell AEM Stock to see if Agnico Eagle Mines still has an edge that holds up under the hood. As a quick background, Agnico Eagle Mines (AEM) engages in exploration, development, and production of mineral properties in Canada, Mexico, and Finland, operating key segments and managing flagship LaRonde mine in Quebec.
This is just one approach to evaluate investments. Trefis High Quality Portfolio evaluates much more, and is designed to reduce stock-specific risk while giving upside exposure
Is The Mismatch In Stock Price Temporary
One way to check if Agnico Eagle Mines stock is expensive now versus the other tickers would be to see how these metrics compared across companies exactly a year ago. Specifically, if there has been a marked reversal in the trend for Agnico Eagle Mines in the last 12 months, then there is a chance that the current mismatch is likely to reverse. On the other hand, a persistent underperformance in revenue and operating income growth for Agnico Eagle Mines would reinforce the conclusion that the stock is expensive compared to its peers, but may not revert soon
Key Metrics Compared 1 Yr Prior
| Metric | AEM | AU |
|---|---|---|
| P/OpInc* | 9.3x | 5.6x |
| LTM OpInc Growth | 105.1% | 246.1% |
| 3Y Avg OpInc Growth | 55.7% | 71.5% |
| LTM Revenue Growth | 32.3% | 39.4% |
| 3Y Avg Revenue Growth | 26.0% | 21.0% |
OpInc = Operating Income
Additional Metrics To Consider
| Metric | AEM | AU |
|---|---|---|
| P/S | 7.5x | 5.2x |
| Market Cap (Current) | $ 79.6 Bil | $ 40.1 Bil |
| LTM Revenue | $ 10.57 Bil | $ 7.65 Bil |
| LTM Opinc | $ 5.22 Bil | $ 2.79 Bil |
| LTM Op Margin | 49.4% | 36.5% |
OpInc = Operating Income
Alternate buying based on valuation, while attractive, needs to be evaluated carefully from multiple angles. Such multi-factor analysis is exactly how we construct Trefis portfolio strategies. If you want upside with a smoother ride than an individual stock, consider the High Quality portfolio, which has outperformed the its benchmark – a combination of S&P 500, Russell, and S&P midcap index.