Here's Why Telus (TU) is a Strong Value Stock

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, and Price/Cash Flow, the Value Style Score identifies the most attractive and most discounted stocks.

Telus (TU)

TELUS Corporation is a leading Canadian telecom service provider based in Burnaby, British Columbia (with executive offices in Vancouver). The company is one of the largest telecom carriers in Canada (the largest in western Canada), covering 95% of the country’s population. TELUS provides wireless, wireline, and Internet communications services for voice and data to businesses and consumers. The company operates as the incumbent local exchange carrier (ILEC) in British Columbia, Alberta and parts of Quebec.

TU sits at a Zacks Rank #2 (Buy), holds a Value Style Score of B, and has a VGM Score of A. Compared to the Diversified Communication Services industry's P/E of 15.7X, shares of Telus are trading at a forward P/E of 18.8X. TU also has a PEG Ratio of 1.9, a Price/Cash Flow ratio of 7.1X, and a Price/Sales ratio of 1.9X.

Value investors don't just pay attention to a company's valuation ratios; positive earnings play a crucial role, too. Three analysts revised their earnings estimate upwards in the last 60 days for fiscal 2022. The Zacks Consensus Estimate has increased $0.05 to $1.02 per share. TU has an average earnings surprise of 2%.

With strong valuation and earnings metrics, a good Zacks Rank, and top-tier Value and VGM Style Scores, investors should strongly think about adding TU to their portfolios.

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