VIV or TU: Which Is the Better Value Stock Right Now?
Investors interested in Diversified Communication Services stocks are likely familiar with Telefonica Brasil (VIV) and Telus (TU). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Telefonica Brasil and Telus 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 VIV has an improving earnings outlook. However, value investors will care about much more than just this.
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 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 16.27, while TU has a forward P/E of 21.44. We also note that VIV has a PEG ratio of 0.97. 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. TU currently has a PEG ratio of 2.83.
Another notable valuation metric for VIV is its P/B ratio of 1.07. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, TU has a P/B of 1.85.
These are just a few of the metrics contributing to VIV's Value grade of A and TU's Value grade of C.
VIV stands above TU thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VIV is the superior value option right now.
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Telefonica Brasil S.A. (VIV) : Free Stock Analysis Report
TELUS Corporation (TU) : Free Stock Analysis Report
