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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 with an interest in Diversified Communication Services stocks have likely encountered both Telefonica Brasil (VIV - Free Report) and NTT (NTTYY - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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.
Telefonica Brasil has a Zacks Rank of #2 (Buy), while NTT has a Zacks Rank of #3 (Hold) right now. 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 try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
VIV currently has a forward P/E ratio of 18.21, while NTTYY has a forward P/E of 292.30. We also note that VIV has a PEG ratio of 1.05. 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. NTTYY currently has a PEG ratio of 45.96.
Another notable valuation metric for VIV is its P/B ratio of 1.25. 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, NTTYY has a P/B of 1.41.
Based on these metrics and many more, VIV holds a Value grade of A, while NTTYY has 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.