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TLK or SCMWY: Which Is the Better Value Stock Right 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 is more attractive to value investors? We'll need to take a closer look to find out.

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.

Right now, PT Telekomunikasi is sporting a Zacks Rank of #2 (Buy), while Swisscom AG has a Zacks Rank of #4 (Sell). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TLK has an improving earnings 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 14.04, while SCMWY has a forward P/E of 16.12. We also note that TLK has a PEG ratio of 1.14. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. SCMWY currently has a PEG ratio of 6.80.

Another notable valuation metric for TLK is its P/B ratio of 2.28. 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, SCMWY has a P/B of 23.46.

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

TLK sticks out from SCMWY in both our Zacks Rank and Style Scores models, so value investors will likely feel that TLK is the better option right now.


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

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