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DTEGY vs. SCMWY: Which Stock Is the Better Value Option?

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Investors with an interest in Diversified Communication Services stocks have likely encountered both Deutsche Telekom AG (DTEGY - Free Report) and Swisscom AG (SCMWY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Deutsche Telekom AG has a Zacks Rank of #2 (Buy), while Swisscom AG has a Zacks Rank of #3 (Hold) right now. Investors should feel comfortable knowing that DTEGY likely has seen a stronger improvement to its earnings outlook than SCMWY has recently. But this is only part of the picture for value investors.

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.

Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DTEGY currently has a forward P/E ratio of 12.08, while SCMWY has a forward P/E of 18.22. We also note that DTEGY has a PEG ratio of 0.87. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SCMWY currently has a PEG ratio of 7.69.

Another notable valuation metric for DTEGY is its P/B ratio of 1.03. 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, SCMWY has a P/B of 25.89.

These are just a few of the metrics contributing to DTEGY's Value grade of A and SCMWY's Value grade of F.

DTEGY sticks out from SCMWY in both our Zacks Rank and Style Scores models, so value investors will likely feel that DTEGY is the better option right now.


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