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Should Value Investors Buy Deutsche Telekom (DTEGY) Stock?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One stock to keep an eye on is Deutsche Telekom (DTEGY - Free Report) . DTEGY is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. The stock has a Forward P/E ratio of 13.29. This compares to its industry's average Forward P/E of 15.65. DTEGY's Forward P/E has been as high as 13.43 and as low as 10.35, with a median of 12.05, all within the past year.

Investors should also note that DTEGY holds a PEG ratio of 1.18. 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. DTEGY's PEG compares to its industry's average PEG of 1.73. DTEGY's PEG has been as high as 2.25 and as low as 1.05, with a median of 1.56, all within the past year.

Another notable valuation metric for DTEGY is its P/B ratio of 1.29. 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. This stock's P/B looks attractive against its industry's average P/B of 2.06. Within the past 52 weeks, DTEGY's P/B has been as high as 1.30 and as low as 0.94, with a median of 1.16.

These are only a few of the key metrics included in Deutsche Telekom's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DTEGY looks like an impressive value stock at the moment.


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