Investors interested in Wireless Non-US stocks are likely familiar with KT Corp. (KT) and TeliaSonera AB (TLSNY). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
KT Corp. and TeliaSonera AB are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that KT's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one piece of the puzzle for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
KT currently has a forward P/E ratio of 7.81, while TLSNY has a forward P/E of 21.61. We also note that KT has a PEG ratio of 0.17. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. TLSNY currently has a PEG ratio of 2.89.
Another notable valuation metric for KT is its P/B ratio of 0.83. 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, TLSNY has a P/B of 2.51.
These metrics, and several others, help KT earn a Value grade of A, while TLSNY has been given a Value grade of C.
KT stands above TLSNY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that KT is the superior value option right now.
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KT Corporation (KT): Free Stock Analysis Report TeliaSonera AB (TLSNY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).
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