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DTEGY or TU: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Diversified Communication Services sector might want to consider either Deutsche Telekom AG (DTEGY - Free Report) or Telus (TU - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. 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.

Deutsche Telekom AG has a Zacks Rank of #2 (Buy), while Telus has a Zacks Rank of #5 (Strong Sell) right now. Investors should feel comfortable knowing that DTEGY likely has seen a stronger improvement to its earnings outlook than TU has recently. 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.

The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.

DTEGY currently has a forward P/E ratio of 13.30, while TU has a forward P/E of 23.44. We also note that DTEGY has a PEG ratio of 1.12. 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. TU currently has a PEG ratio of 2.06.

Another notable valuation metric for DTEGY is its P/B ratio of 0.99. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, TU has a P/B of 2.22.

Based on these metrics and many more, DTEGY holds a Value grade of A, while TU has a Value grade of D.

DTEGY stands above TU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DTEGY is the superior value option right now.


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