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Telefonica Brasil S.A. (VIV) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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Telefonica Brasil S.A. (VIV) - free report >>
Nippon Telegraph and Telephone Corporation (NTTYY) - free report >>
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VIV vs. NTTYY: Which Stock Is the Better Value Option?
Investors interested in Diversified Communication Services stocks are likely familiar with Telefonica Brasil (VIV - Free Report) and NTT (NTTYY - 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.
Telefonica Brasil and NTT are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that VIV likely has seen a stronger improvement to its earnings outlook than NTTYY has recently. But this is just one factor that value investors are interested in.
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.
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.
VIV currently has a forward P/E ratio of 17.15, while NTTYY has a forward P/E of 256.36. We also note that VIV has a PEG ratio of 3.77. 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. NTTYY currently has a PEG ratio of 40.31.
Another notable valuation metric for VIV is its P/B ratio of 1.04. 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, NTTYY has a P/B of 1.42.
These are just a few of the metrics contributing to VIV's Value grade of B and NTTYY's Value grade of C.
VIV stands above NTTYY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VIV is the superior value option right now.