Are These Utilities Stocks Undervalued Right Now?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to...
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
One stock to keep an eye on is Deutsche Telekom (DTEGY). DTEGY is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.21, while its industry has an average P/E of 23.21. Over the past 52 weeks, DTEGY's Forward P/E has been as high as 17.04 and as low as 11.74, with a median of 14.98.
Investors will also notice that DTEGY has a PEG ratio of 1.24. 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. DTEGY's industry currently sports an average PEG of 1.61. DTEGY's PEG has been as high as 4.54 and as low as 1.19, with a median of 1.46, all within the past year.
Investors should also recognize that DTEGY has a P/B ratio of 0.94. Investors use the P/B ratio to look at a stock's market value versus 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 2.07. Within the past 52 weeks, DTEGY's P/B has been as high as 1.17 and as low as 0.90, with a median of 1.04.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DTEGY has a P/S ratio of 0.68. This compares to its industry's average P/S of 1.76.
Telekom Austria (TKAGY) may be another strong Diversified Communication Services stock to add to your shortlist. TKAGY is a # 2 (Buy) stock with a Value grade of A.
Telekom Austria sports a P/B ratio of 1.61 as well; this compares to its industry's price-to-book ratio of 2.07. In the past 52 weeks, TKAGY's P/B has been as high as 1.75, as low as 1.52, with a median of 1.60.
These are just a handful of the figures considered in Deutsche Telekom and Telekom Austria's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DTEGY and TKAGY is an impressive value stock right now.
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Deutsche Telekom AG (DTEGY): Free Stock Analysis Report
Telekom Austria AG (TKAGY): Free Stock Analysis Report
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