VIV vs. NTTYY: Which Stock Is the Better Value Option?
Investors looking for stocks in the Diversified Communication Services sector might want to consider either Telefonica Brasil (VIV) or 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.
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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, Telefonica Brasil has a Zacks Rank of #2 (Buy), while NTT has a Zacks Rank of #3 (Hold). This means that VIV's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst 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 14.26, while NTTYY has a forward P/E of 319.90. We also note that VIV has a PEG ratio of 0.76. 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. NTTYY currently has a PEG ratio of 57.13.
Another notable valuation metric for VIV is its P/B ratio of 1.21. 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, NTTYY has a P/B of 1.55.
These are just a few of the metrics contributing to VIV's Value grade of A and NTTYY's 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
