VIV vs. TU: Which Stock Should Value Investors Buy 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.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Telefonica Brasil is sporting a Zacks Rank of #2 (Buy), while Telus has a Zacks Rank of #3 (Hold). Investors should feel comfortable knowing that VIV likely has seen a stronger improvement to its earnings outlook than TU has recently. However, value investors will care about much more than just this.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.
Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.
VIV currently has a forward P/E ratio of 15.06, while TU has a forward P/E of 22.90. We also note that VIV has a PEG ratio of 0.81. 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 3.99.
Another notable valuation metric for VIV is its P/B ratio of 1.26. 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, TU has a P/B of 2.04.
These metrics, and several others, help VIV earn a Value grade of A, while TU has been given a Value grade of C.
VIV sticks out from TU in both our Zacks Rank and Style Scores models, so value investors will likely feel that VIV is the better option right now.
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Telefonica Brasil S.A. (VIV) : Free Stock Analysis Report
TELUS Corporation (TU) : Free Stock Analysis Report
