NTTYY vs. SCMWY: Which Stock Is the Better Value Option?
Investors interested in Diversified Communication Services stocks are likely familiar with NTT (NTTYY) and Swisscom AG (SCMWY). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
NTT and Swisscom AG are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. This means that NTTYY's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
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.
NTTYY currently has a forward P/E ratio of 10.77, while SCMWY has a forward P/E of 17.70. We also note that NTTYY has a PEG ratio of 1.62. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. SCMWY currently has a PEG ratio of 7.47.
Another notable valuation metric for NTTYY is its P/B ratio of 1.36. 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, SCMWY has a P/B of 25.16.
Based on these metrics and many more, NTTYY holds a Value grade of A, while SCMWY has a Value grade of F.
NTTYY stands above SCMWY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that NTTYY is the superior value option right now.
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Nippon Telegraph and Telephone Corporation (NTTYY) : Free Stock Analysis Report
Swisscom AG (SCMWY) : Free Stock Analysis Report
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