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VEON vs. BCE: Which Stock Should Value Investors Buy Now?

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Investors interested in stocks from the Diversified Communication Services sector have probably already heard of VEON Ltd. (VEON) and BCE (BCE). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

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.

Right now, VEON Ltd. is sporting a Zacks Rank of #2 (Buy), while BCE has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that VEON likely has seen a stronger improvement to its earnings outlook than BCE has recently. However, value investors will care about much more than just this.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

VEON currently has a forward P/E ratio of 7.35, while BCE has a forward P/E of 17.48. We also note that VEON has a PEG ratio of 0.27. 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. BCE currently has a PEG ratio of 4.27.

Another notable valuation metric for VEON is its P/B ratio of 2.11. 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, BCE has a P/B of 3.34.

These metrics, and several others, help VEON earn a Value grade of A, while BCE has been given a Value grade of C.

VEON 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 VEON is likely the superior value option right now.

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