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BCE, Inc. (BCE) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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NTTYY or BCE: Which Is the Better Value Stock Right Now?
Investors with an interest in Diversified Communication Services stocks have likely encountered both NTT (NTTYY - 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.
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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Currently, NTT has a Zacks Rank of #1 (Strong Buy), while BCE has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that NTTYY likely has seen a stronger improvement to its earnings outlook than BCE has recently. 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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
NTTYY currently has a forward P/E ratio of 10.49, while BCE has a forward P/E of 18.24. We also note that NTTYY has a PEG ratio of 1.51. 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. BCE currently has a PEG ratio of 3.80.
Another notable valuation metric for NTTYY is its P/B ratio of 1.39. 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, BCE has a P/B of 2.84.
These metrics, and several others, help NTTYY earn a Value grade of B, while BCE has been given a Value grade of C.
NTTYY sticks out from BCE in both our Zacks Rank and Style Scores models, so value investors will likely feel that NTTYY is the better option right now.