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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.
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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Right now, both NTT and Swisscom AG are sporting a Zacks Rank of # 1 (Strong Buy). This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. But this is just one piece of the puzzle for value investors.
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.
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.
NTTYY currently has a forward P/E ratio of 10.56, while SCMWY has a forward P/E of 18.51. We also note that NTTYY has a PEG ratio of 1.51. 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. SCMWY currently has a PEG ratio of 7.81.
Another notable valuation metric for NTTYY is its P/B ratio of 1.47. 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, SCMWY has a P/B of 29.16.
Based on these metrics and many more, NTTYY holds a Value grade of B, while SCMWY has a Value grade of F.
Both NTTYY and SCMWY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that NTTYY is the superior value option right now.