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CHL vs. BB: Which Stock Is the Better Value Option?

Zacks Equity Research
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Investors interested in stocks from the Wireless Non-US sector have probably already heard of China Mobile (CHL) and BlackBerry (BB). But which of these two companies is the best option for those looking for undervalued stocks? Let's 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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Right now, China Mobile is sporting a Zacks Rank of #1 (Strong Buy), while BlackBerry has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that CHL likely has seen a stronger improvement to its earnings outlook than BB has recently. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks 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.

CHL currently has a forward P/E ratio of 10.87, while BB has a forward P/E of 96.95. We also note that CHL has a PEG ratio of 2.66. 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. BB currently has a PEG ratio of 5.22.

Another notable valuation metric for CHL is its P/B ratio of 1.24. 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, BB has a P/B of 1.91.

These metrics, and several others, help CHL earn a Value grade of B, while BB has been given a Value grade of D.

CHL has seen stronger estimate revision activity and sports more attractive valuation metrics than BB, so it seems like value investors will conclude that CHL is the superior option right now.

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China Mobile (Hong Kong) Ltd. (CHL) : Free Stock Analysis Report
BlackBerry Limited (BB) : Free Stock Analysis Report
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