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Telefonica Brasil S.A. (VIV) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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Telefonica Brasil S.A. (VIV) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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VIV or NTTYY: Which Is the Better Value Stock Right Now?
Investors interested in Diversified Communication Services stocks are likely familiar with Telefonica Brasil (VIV - Free Report) and NTT (NTTYY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's 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 NTT has a Zacks Rank of #4 (Sell). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that VIV is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
VIV currently has a forward P/E ratio of 17.72, while NTTYY has a forward P/E of 291.30. We also note that VIV has a PEG ratio of 1.02. 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. NTTYY currently has a PEG ratio of 45.80.
Another notable valuation metric for VIV is its P/B ratio of 1.22. 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, NTTYY has a P/B of 1.39.
These are just a few of the metrics contributing to VIV's Value grade of A and NTTYY's Value grade of C.
VIV has seen stronger estimate revision activity and sports more attractive valuation metrics than NTTYY, so it seems like value investors will conclude that VIV is the superior option right now.