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

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Investors interested in stocks from the Diversified Communication Services sector have probably already heard of Telefonica Brasil (VIV - Free Report) and BCE (BCE - 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.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.

Currently, Telefonica Brasil has a Zacks Rank of #2 (Buy), while BCE has a Zacks Rank of #3 (Hold). This means that VIV'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 analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

VIV currently has a forward P/E ratio of 15.28, while BCE has a forward P/E of 18.93. We also note that VIV has a PEG ratio of 1.91. 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 3.94.

Another notable valuation metric for VIV is its P/B ratio of 0.91. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, BCE has a P/B of 2.96.

These metrics, and several others, help VIV earn a Value grade of A, while BCE has been given a Value grade of C.

VIV is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VIV is likely the superior value option right now.


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Telefonica Brasil S.A. (VIV) - free report >>

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