It's one of the oldest debates on Wall Street: growth stocks versus value stocks. Which should be bought and held by the investment community?

According to a report released in 2016 by Bank of America/Merrill Lynch, investors don't have to be picky. After examining the performance of growth stocks and value stocks over a 90-year period (1926-2015), BofA/Merrill Lynch found that value stocks outdid growth stocks on an annualized basis (17% to 12.6%), but both had the potential to make long-term investors rich.

A dollar sign emerging from a financial newspaper.

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Interestingly enough, we've watched growth stocks run circles around value stocks over the past 11 years. My suspicion is that historically low lending rates are allowing high-growth companies to borrow cheaply and expand rapidly, which is what's behind this outperformance.

But what investors might not realize is that growth stocks and value stocks can be one and the same. Though we like to think of rapidly growing companies as being incapable of fitting the fundamental definition of a value stock, or a value company as being capable of rapid sales growth, it's possible for a stock to fit both definitions.

What might come as a real shock to the investment community is that there's an entire industry right now that's delivering off-the-charts sales growth with forward price-to-earnings ratios that are well below historical averages, and even that of the benchmark S&P 500. It's also an industry that's well off the radar of most Wall Street investment firms.

Ladies and gentlemen, take a gander at gold stocks.

An up-close view of a gold bar.

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Wall Street's hidden but lustrous gem of an industry

Yes, I just said gold stocks.

Traditionally, precious-metal miners wouldn't be considered a high-growth industry, but the definition shifts when we're talking about the underlying commodity they produce increasing in value by over $350 an ounce in 2020. At one point, when the lustrous yellow metal hit an all-time nominal high in August, its per-ounce price was up about $600/oz. on a year-to-date basis. With the realized price of precious metals headed higher, there's going to be a surge in recognized revenue and a push to produce as much as possible.

The thing about physical gold is that it's pretty much never had this many catalysts working in its favor. An all-time record $17 trillion in global investment-grade debt was recently yielding a negative interest rate, while the U.S. Federal Reserve has been adamant about keeping lending rates at or near historic lows. This implies that income seekers will have few avenues to generate inflation-topping returns, and it makes gold the most logical store of value for years to come.

Dovish monetary policy should also provide a boost. The nation's central bank has opened its wallet on an unlimited basis to support the financial markets. Meanwhile, Washington, D.C., seems destined to eventually pass another round of coronavirus-targeted fiscal stimulus. In other words, the money supply is ballooning, which should pressure the dollar and send gold even higher (the dollar and gold have an inverse relationship).

An excavator operating in an underground precious-metal mine.

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Gold stocks offer high growth and deep-discounted value

However, it's not just double-digit top-line growth that'll turn the heads of investors. It's combining this double-digit sales growth with single-digit or low-double-digit forward price-to-earnings ratios.

For example, SSR Mining (NASDAQ:SSRM) recently completed its merger of equals with Turkey's Alacer Gold. This combined SSR's three predominantly gold-producing assets (Marigold, Seabee, and the Puna Operations) with Alacer's majority interest in the gold-focused Copler mine, and will nearly double SSR's peak annual gold output potential to as much as 760,000 ounces a year.

Between a significantly higher realized sales price for gold and silver and big uptick in production, SSR Mining should see its sales catapult from $607 million in 2019 to about $1.5 billion in 2021. Meanwhile, the company's consensus earnings per share should jump from an adjusted $0.81 in 2019 to $2.45 by 2021. If these figures are accurate, SSR Mining is currently valued at seven times next year's earnings per share (EPS), and is well below five times cash flow. In fact, the company's management team expects $450 million in annual free cash flow in each of the next two years.

As the icing on the cake, SSR Mining's healthy net cash balance has allowed the company to institute a $0.05 per quarter dividend, equating to about a 1.2% yield, beginning in the first quarter of 2021.

A person holding a magnifying glass above a company's balance sheet.

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But SSR Mining isn't alone. Kirkland Lake Gold (NYSE:KL) is also churning out exceptionally fast top-line growth and is ridiculously inexpensive when you take into account its industry-leading balance sheet and capital returns. Following its acquisition of Detour Gold earlier this year, Kirkland Lake should see full-year revenue essentially double between 2019 and 2021. Meanwhile, EPS is expected to jump from $2.74 in 2019 to $4.15 by 2021, placing its forward price-to-earnings ratio at less than 10.

But Kirkland isn't your run-of-the-mill mining company. Its all-in sustaining costs have consistently come in below the industry average, leading to higher cash operating margins relative to its peers. It also ended the third quarter with $848 million in cash and no debt. Such an incredible balance sheet has allowed the company to triple its quarterly dividend in 2020 and repurchase an astonishing 14,029,000 shares of its own stock for $526.6 million. 

The gold-mining industry is filled with value stocks that are growing like wildfire. With the price of gold likely to be buoyed by a laundry list of catalysts, gold stocks could offer the perfect blend of growth and value for investors.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.