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DTEGY or SCMWY: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Diversified Communication Services sector have probably already heard of Deutsche Telekom AG (DTEGY - Free Report) and Swisscom AG (SCMWY - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to 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 puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Both Deutsche Telekom AG and Swisscom AG have a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture 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.
DTEGY currently has a forward P/E ratio of 11.21, while SCMWY has a forward P/E of 15.65. We also note that DTEGY has a PEG ratio of 1.96. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. SCMWY currently has a PEG ratio of 6.60.
Another notable valuation metric for DTEGY is its P/B ratio of 0.93. 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 24.56.
These are just a few of the metrics contributing to DTEGY's Value grade of B and SCMWY's Value grade of F.
Both DTEGY and SCMWY are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DTEGY is the superior value option right now.