4 Precious Metals Stocks With Value Characteristics

If the gold and silver markets have put in a low – and it looks to some price chart analysts as if they may have – it may be appropriate to look one more time at precious metals stocks. An examination of this sector, based on finding the possibility of classic value, shows that these four companies may warrant further, more in-depth research as potential inflation hedges as global inflation turns out to be higher and more persistent than expected.

1. Kinross Gold

The Canada-based Kinross Gold (

KGC, Financial) is having a good year as earnings per share grew a healthy 71.2% in the most recent earnings results. Over the past five years, the EPS growth rate has been a solid 25.7%. The company has a price-earnings ratio of 5.98, which is much lower than the Shiller price-earnings ratio for the S&P 500, which comes in at 38.7.

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At this moment, the stock can be purchased on the New York Stock Exchange at just over book value: the price-book ratio is 1.18. Kinross pays a dividend of 1.90%. The GuruFocus summary of the company’s financials shows one medium warning sign and three severe warning signs. The debt-to-equity ratio is 0.22 and debt-to-Ebitda is 0.53.

2. Kirkland Lake Gold

Kirkland Lake Gold (

KL, Financial) is another mining company headquartered in Canada. Earnings per share are up 9.2% this year and the five-year EPS growth rate is 129.9%. It trades on the New York Stock Exchange at a price-book ratio of 2.23 and a price-earnings ratio of 14.41.

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The dividend yield comes to 1.65%. Kirkland’s debt-to-equity ratio is a mere 0.01 and the debt-to-Ebitda ratio is 0.02. The cash-debt ratio is 34.71. GuruFocus’ financials summary gives the mining outfit five good signs, one medium warning sign and two severe warning signs.

3. SSR Mining

SSR Mining (

SSRM, Financial) is yet another Canadian miner. The stock is available for purchase on the NASDAQ at just about book value: the price-book ratio is 1.03. The price-earnings ratio is similar to that of Kirkland’s at 14.18. This year’s earnings per share growth was 73.70%.

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Over the past five years, the EPS growth was 20.40%. Investors are paid a 1.23% dividend yield. The debt-to-equity ratio is 0.14, while debt-to-Ebitda is 0.75. The GuruFocus summary of financials finds three good signs, one medium warning sign and one severe warning sign.

4. Silvercorp Metals

Silvercorp Metals (

SVM, Financial) is, as the name implies, a silver mining company. It is also headquartered in Canada – it seems Canada is the world capital of cheap mining stocks. The stock trades on the AMEX with a price-earnings ratio of 16.49 and a price-book ratio of 1.54. The miner’s earnings per share increased by 33% this year.

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The five-year record of EPS growth is 47.60%. Silvercorp pays a 0.70% dividend. The cash-debt ratio comes in at 133.02%. The debt-to-Ebitda ratio is 0.02. GuruFocus shows nine good signs for this company.

Naturally, there are no guarantees in the stock market, much less in the precious metals sector. Gold and silver mining stocks can be volatile. On the other hand, if inflation turns out to be more than just transitory, a scenario that is seeming more and more likely by the day, these companies may benefit as inflation hedges.

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