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DTEGY vs. TU: Which Stock Should Value Investors Buy Now?

Zacks Equity Research
·2 min read

Investors with an interest in Diversified Communication Services stocks have likely encountered both Deutsche Telekom AG (DTEGY) and Telus (TU). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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.

Currently, Deutsche Telekom AG has a Zacks Rank of #2 (Buy), while Telus has a Zacks Rank of #3 (Hold). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that DTEGY is likely seeing its earnings outlook improve to a greater extent. However, value investors will care about much more than just this.

Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their current share price levels.

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Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DTEGY currently has a forward P/E ratio of 14.38, while TU has a forward P/E of 23.66. We also note that DTEGY has a PEG ratio of 1.38. 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. TU currently has a PEG ratio of 2.42.

Another notable valuation metric for DTEGY is its P/B ratio of 0.97. 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. For comparison, TU has a P/B of 2.37.

These metrics, and several others, help DTEGY earn a Value grade of A, while TU has been given a 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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Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report
 
TELUS Corporation (TU) : Free Stock Analysis Report
 
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