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CHL or AMX: Which Is the Better Value Stock Right Now?
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 stocks offers value investors a better bang for their buck right now? We'll need to 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
China Mobile has a Zacks Rank of #2 (Buy), while Amer Movil has a Zacks Rank of #3 (Hold) right now. This means that CHL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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.
CHL currently has a forward P/E ratio of 9.03, while AMX has a forward P/E of 76.14. We also note that CHL has a PEG ratio of 2.72. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. AMX currently has a PEG ratio of 5.64.
Another notable valuation metric for CHL is its P/B ratio of 0.86. 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, AMX has a P/B of 3.57.
Based on these metrics and many more, CHL holds a Value grade of A, while AMX has a Value grade of C.
CHL 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 CHL is likely the superior value option right now.