VIV or NTTYY: Which Is the Better Value Stock Right Now?
Investors with an interest in Diversified Communication Services stocks have likely encountered both Telefonica Brasil (VIV) and NTT (NTTYY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Telefonica Brasil has a Zacks Rank of #2 (Buy), while NTT 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 VIV has an improving earnings outlook. However, value investors will care about much more than just this.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
VIV currently has a forward P/E ratio of 15.89, while NTTYY has a forward P/E of 263.55. We also note that VIV has a PEG ratio of 0.95. 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. NTTYY currently has a PEG ratio of 41.44.
Another notable valuation metric for VIV is its P/B ratio of 1.01. 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, NTTYY has a P/B of 1.46.
Based on these metrics and many more, VIV holds a Value grade of A, while NTTYY has a Value grade of C.
VIV is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that VIV is likely the superior value option right now.
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Telefonica Brasil S.A. (VIV) : Free Stock Analysis Report
Nippon Telegraph and Telephone Corporation (NTTYY) : Free Stock Analysis Report
