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TLK vs. SCMWY: Which Stock Should Value Investors Buy Now?

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Investors interested in Diversified Communication Services stocks are likely familiar with PT Telekomunikasi (TLK - Free Report) and Swisscom AG (SCMWY - 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 Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

PT Telekomunikasi has a Zacks Rank of #2 (Buy), while Swisscom AG has a Zacks Rank of #3 (Hold) right now. 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 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

TLK currently has a forward P/E ratio of 13.41, while SCMWY has a forward P/E of 15.50. We also note that TLK has a PEG ratio of 1.08. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. SCMWY currently has a PEG ratio of 6.54.

Another notable valuation metric for TLK is its P/B ratio of 2.13. 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 23.34.

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

TLK 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 TLK is likely the superior value option right now.


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PT Telekomunikasi Indonesia, Tbk (TLK) - free report >>

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