TU or CHT: Which Is the Better Value Stock Right Now?
Investors interested in Diversified Communication Services stocks are likely familiar with Telus (TU) and Chunghwa (CHT). But which of these two stocks presents investors with the better value opportunity right now? 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 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.
Telus and Chunghwa are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that TU has an improving earnings outlook. But this is just one piece of the puzzle 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
TU currently has a forward P/E ratio of 17.92, while CHT has a forward P/E of 26.75. We also note that TU has a PEG ratio of 3.12. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. CHT currently has a PEG ratio of 18.97.
Another notable valuation metric for TU is its P/B ratio of 2.14. 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 2.27.
Based on these metrics and many more, TU holds a Value grade of B, while CHT has a Value grade of D.
TU stands above CHT thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TU is the superior value option right now.
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TELUS Corporation (TU) : Free Stock Analysis Report
Chunghwa Telecom Co., Ltd. (CHT) : Free Stock Analysis Report
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