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Swisscom AG (SCMWY) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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Swisscom AG (SCMWY) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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NTTYY or SCMWY: Which Is the Better Value Stock Right Now?
Investors looking for stocks in the Diversified Communication Services sector might want to consider either NTT (NTTYY - Free Report) or Swisscom AG (SCMWY - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
NTT and Swisscom AG are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that NTTYY'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.
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.
NTTYY currently has a forward P/E ratio of 11.16, while SCMWY has a forward P/E of 18.31. We also note that NTTYY has a PEG ratio of 1.60. 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. SCMWY currently has a PEG ratio of 7.73.
Another notable valuation metric for NTTYY is its P/B ratio of 1.47. 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 27.11.
These metrics, and several others, help NTTYY earn a Value grade of B, while SCMWY has been given a Value grade of F.
NTTYY sticks out from SCMWY in both our Zacks Rank and Style Scores models, so value investors will likely feel that NTTYY is the better option right now.