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DTEGY vs. CHT: Which Stock Is the Better Value Option?
Investors with an interest in Diversified Communication Services stocks have likely encountered both Deutsche Telekom AG (DTEGY - Free Report) and Chunghwa (CHT - 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 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.
Right now, Deutsche Telekom AG is sporting a Zacks Rank of #2 (Buy), while Chunghwa has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DTEGY has an improving earnings outlook. But this is only part of the picture for value investors.
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 Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
DTEGY currently has a forward P/E ratio of 14.07, while CHT has a forward P/E of 24.65. We also note that DTEGY has a PEG ratio of 1.13. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. CHT currently has a PEG ratio of 17.73.
Another notable valuation metric for DTEGY is its P/B ratio of 1.48. 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, CHT has a P/B of 2.42.
These metrics, and several others, help DTEGY earn a Value grade of A, while CHT has been given a Value grade of D.
DTEGY stands above CHT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that DTEGY is the superior value option right now.