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TEF or TU: Which Is the Better Value Stock Right Now?
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Investors with an interest in Diversified Communication Services stocks have likely encountered both Telefonica (TEF - Free Report) and Telus (TU - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 has a Zacks Rank of #2 (Buy), while Telus has a Zacks Rank of #3 (Hold). This means that TEF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
TEF currently has a forward P/E ratio of 12.74, while TU has a forward P/E of 21.57. We also note that TEF has a PEG ratio of 2.17. 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. TU currently has a PEG ratio of 3.11.
Another notable valuation metric for TEF is its P/B ratio of 0.66. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TU has a P/B of 2.
These are just a few of the metrics contributing to TEF's Value grade of A and TU's Value grade of C.
TEF stands above TU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TEF is the superior value option right now.
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TEF or TU: Which Is the Better Value Stock Right Now?
Investors with an interest in Diversified Communication Services stocks have likely encountered both Telefonica (TEF - Free Report) and Telus (TU - 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. 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 has a Zacks Rank of #2 (Buy), while Telus has a Zacks Rank of #3 (Hold). This means that TEF's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture 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.
TEF currently has a forward P/E ratio of 12.74, while TU has a forward P/E of 21.57. We also note that TEF has a PEG ratio of 2.17. 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. TU currently has a PEG ratio of 3.11.
Another notable valuation metric for TEF is its P/B ratio of 0.66. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, TU has a P/B of 2.
These are just a few of the metrics contributing to TEF's Value grade of A and TU's Value grade of C.
TEF stands above TU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TEF is the superior value option right now.