DTEGY or TU: what is the best value right now? – December 30, 2021
Investors interested in stocks in the diversified communications services sector have probably heard of Deutsche Telekom AG (DTEGY – Free report) and Telus (YOU – Free report). But which of these two stocks is offering the best value for value investors right now? We will have to take a closer look.
Everyone has their own methods of finding great value opportunities, but our model includes pairing an impressive score in the Value category of our style scoring system with a strong Zacks Rank. Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our style scores allow companies to be rated based on specific characteristics.
Deutsche Telekom AG has a Zacks rank of # 2 (Buy), while Telus has a Zacks rank of # 3 (Hold) at this time. This means that DTEGY’s earnings estimate revision activity has been more impressive, so investors should feel comfortable with the improving outlook for analysts. But that’s only part of the picture for value investors.
Value investors also tend to look at a number of traditional and proven numbers to help them find stocks they believe are undervalued at their current price levels.
Our Value category ranks stocks based on a number of key metrics, including proven P / E ratio, P / S ratio, earnings performance and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
DTEGY currently has a forward P / E of 13.39, while TU has a forward P / E of 27.17. We also note that DTEGY has a PEG ratio of 1.36. This metric is used similarly to the famous P / E ratio, but the PEG ratio also takes into account the expected growth rate of the stock’s earnings. TU currently has a PEG ratio of 3.02.
Another notable valuation indicator for DTEGY is its P / B ratio of 0.95. P / B is a method of comparing the market value of a stock to its book value, which is defined as total assets minus total liabilities. By comparison, TU has a P / B of 2.51.
These measures, and several others, help DTEGY achieve a value rating of A, while TU received a value rating of C.
DTEGY currently shows an improving earnings outlook, which makes it stand out in our Zacks Rank model. And, based on the valuation metrics above, we think DTEGY is probably the top value option right now.