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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 vs. NTTYY: Which Stock Is the Better Value Option?
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 is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify 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 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 18.33, while NTTYY has a forward P/E of 296.20. We also note that VIV has a PEG ratio of 1.06. 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 52.89.
Another notable valuation metric for VIV is its P/B ratio of 1.26. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, NTTYY has a P/B of 1.43.
These are just a few of the metrics contributing to VIV's Value grade of A and NTTYY's Value grade of C.
VIV stands above NTTYY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VIV is the superior value option right now.