VIV or TU: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Diversified Communication Services sector have probably already heard of Telefonica Brasil (VIV) and Telus (TU). 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 proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight 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. But this is only part of the picture for value investors.
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 14.55, while TU has a forward P/E of 21.57. We also note that VIV has a PEG ratio of 0.78. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. TU currently has a PEG ratio of 3.36.
Another notable valuation metric for VIV is its P/B ratio of 1.23. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TU has a P/B of 1.98.
These metrics, and several others, help VIV earn a Value grade of A, while TU has been given a 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
