Investors looking for stocks in the Wireless Non-US sector might want to consider either China Mobile (CHL - Free Report) or Amer Movil (AMX - 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
China Mobile has a Zacks Rank of #1 (Strong Buy), while Amer Movil has a Zacks Rank of #4 (Sell) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that CHL has an improving earnings outlook. However, value investors will care about much more than just this.
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.
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.
CHL currently has a forward P/E ratio of 9.38, while AMX has a forward P/E of 43.19. We also note that CHL has a PEG ratio of 2.83. 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. AMX currently has a PEG ratio of 2.93.
Another notable valuation metric for CHL is its P/B ratio of 0.89. 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, AMX has a P/B of 3.89.
These metrics, and several others, help CHL earn a Value grade of A, while AMX has been given a Value grade of C.
CHL sticks out from AMX in both our Zacks Rank and Style Scores models, so value investors will likely feel that CHL is the better option right now.