Yahoo Finance Are Investors Undervaluing Deutsche Telekom (DTEGY) Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
One company value investors might notice is Deutsche Telekom (DTEGY). DTEGY is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with P/E ratio of 13.16 right now. For comparison, its industry sports an average P/E of 16.34. Over the past year, DTEGY's Forward P/E has been as high as 13.16 and as low as 10.35, with a median of 11.92.
Investors should also note that DTEGY holds a PEG ratio of 1.17. 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. DTEGY's industry currently sports an average PEG of 1.55. Within the past year, DTEGY's PEG has been as high as 2.25 and as low as 1.05, with a median of 1.59.
Another valuation metric that we should highlight is DTEGY's P/B ratio of 1.28. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. DTEGY's current P/B looks attractive when compared to its industry's average P/B of 2. Within the past 52 weeks, DTEGY's P/B has been as high as 1.28 and as low as 0.94, with a median of 1.15.
Another great Diversified Communication Services stock you could consider is Telefonica (TEF), which is a # 2 (Buy) stock with a Value Score of A.
Shares of Telefonica currently holds a Forward P/E ratio of 12.43, and its PEG ratio is 3.01. In comparison, its industry sports average P/E and PEG ratios of 16.34 and 1.55.
Over the last 12 months, TEF's P/E has been as high as 14.44, as low as 10.58, with a median of 12.83, and its PEG ratio has been as high as 3.67, as low as 0.51, with a median of 1.79.
Additionally, Telefonica has a P/B ratio of 0.82 while its industry's price-to-book ratio sits at 2. For TEF, this valuation metric has been as high as 0.93, as low as 0.62, with a median of 0.76 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Deutsche Telekom and Telefonica are likely undervalued currently. And when considering the strength of its earnings outlook, DTEGY and TEF sticks out as one of the market's strongest value stocks.
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Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report
Telefonica SA (TEF) : Free Stock Analysis Report
