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DTEGY vs. TLK: Which Stock Is the Better Value Option?

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Investors interested in stocks from the Diversified Communication Services sector have probably already heard of Deutsche Telekom AG (DTEGY - Free Report) and PT Telekomunikasi (TLK - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? 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 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.

Currently, both Deutsche Telekom AG and PT Telekomunikasi are holding a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. 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 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.

DTEGY currently has a forward P/E ratio of 12.01, while TLK has a forward P/E of 13.26. We also note that DTEGY has a PEG ratio of 0.84. 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. TLK currently has a PEG ratio of 1.42.

Another notable valuation metric for DTEGY is its P/B ratio of 1.13. 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, TLK has a P/B of 2.29.

These are just a few of the metrics contributing to DTEGY's Value grade of A and TLK's Value grade of C.

Both DTEGY and TLK are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DTEGY is the superior value option right now.


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