U.S. Markets closed

Is Deutsche Telekom (DTEGY) a Great Value Stock Right Now?

Zacks Equity Research
Chevron (CVX) doesn't possess the right combination of the two key ingredients for a likely earnings beat in its upcoming report. Get prepared with the key expectations.

Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company to watch right now is Deutsche Telekom (DTEGY). DTEGY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value.

DTEGY is also sporting a PEG ratio of 1.25. 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. DTEGY's industry has an average PEG of 1.60 right now. DTEGY's PEG has been as high as 13.46 and as low as 1.25, with a median of 1.33, all within the past year.

Another valuation metric that we should highlight is DTEGY's P/B ratio of 1.58. 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. This company's current P/B looks solid when compared to its industry's average P/B of 2.08. Over the past year, DTEGY's P/B has been as high as 1.62 and as low as 1.32, with a median of 1.52.

Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DTEGY has a P/S ratio of 0.91. This compares to its industry's average P/S of 1.19.

Finally, our model also underscores that DTEGY has a P/CF ratio of 4.09. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 9.88. Over the past year, DTEGY's P/CF has been as high as 4.19 and as low as 3.36, with a median of 3.82.

These are just a handful of the figures considered in Deutsche Telekom's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DTEGY is an impressive value stock right now.


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.