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KT or BB: Which Is the Better Value Stock Right Now?

Zacks Equity Research
·2 min read

Investors interested in stocks from the Wireless Non-US sector have probably already heard of KT Corp. (KT) and BlackBerry (BB). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.

There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The proven Zacks Rank emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, KT Corp. has a Zacks Rank of #2 (Buy), while BlackBerry 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 KT is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.

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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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 8.71, while BB has a forward P/E of 94.13. We also note that KT has a PEG ratio of 0.79. 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. BB currently has a PEG ratio of 1.82.

Another notable valuation metric for KT is its P/B ratio of 0.41. 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, BB has a P/B of 1.46.

These are just a few of the metrics contributing to KT's Value grade of A and BB's Value grade of F.

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


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KT Corporation (KT) : Free Stock Analysis Report
 
BlackBerry Limited (BB) : Free Stock Analysis Report
 
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Zacks Investment Research