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DTEGY or TU: Which Is the Better Value Stock Right Now?

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Investors looking for stocks in the Diversified Communication Services sector might want to consider either Deutsche Telekom AG (DTEGY - Free Report) or Telus (TU - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Deutsche Telekom AG has a Zacks Rank of #1 (Strong Buy), while Telus has a Zacks Rank of #2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that DTEGY has an improving earnings outlook. But this is just one piece of the puzzle for value investors.

Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its 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.

DTEGY currently has a forward P/E ratio of 16.22, while TU has a forward P/E of 21.14. We also note that DTEGY has a PEG ratio of 1.29. 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 5.02.

Another notable valuation metric for DTEGY is its P/B ratio of 1.78. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, TU has a P/B of 1.89.

These are just a few of the metrics contributing to DTEGY's Value grade of B and TU's Value grade of C.

DTEGY sticks out from TU in both our Zacks Rank and Style Scores models, so value investors will likely feel that DTEGY is the better option right now.


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