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TLK or BCE: Which Is the Better Value Stock Right Now?

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Investors with an interest in Diversified Communication Services stocks have likely encountered both PT Telekomunikasi (TLK - Free Report) and BCE (BCE - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, PT Telekomunikasi is sporting a Zacks Rank of #2 (Buy), while BCE has a Zacks Rank of #3 (Hold). This means that TLK's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle 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.

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.

TLK currently has a forward P/E ratio of 14.46, while BCE has a forward P/E of 17.31. We also note that TLK has a PEG ratio of 1.17. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. BCE currently has a PEG ratio of 5.61.

Another notable valuation metric for TLK is its P/B ratio of 2.35. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, BCE has a P/B of 2.88.

These are just a few of the metrics contributing to TLK's Value grade of B and BCE's Value grade of C.

TLK has seen stronger estimate revision activity and sports more attractive valuation metrics than BCE, so it seems like value investors will conclude that TLK is the superior option right now.


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