VEON or CHT: Which Is the Better Value Stock Right Now?
Investors with an interest in Diversified Communication Services stocks have likely encountered both VEON Ltd. (VEON) and Chunghwa (CHT). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
VEON Ltd. has a Zacks Rank of #2 (Buy), while Chunghwa has a Zacks Rank of #3 (Hold) right now. This means that VEON's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. However, value investors will care about much more than just this.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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.
VEON currently has a forward P/E ratio of 6.98, while CHT has a forward P/E of 25.75. We also note that VEON has a PEG ratio of 0.55. 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. CHT currently has a PEG ratio of 18.27.
Another notable valuation metric for VEON is its P/B ratio of 2.01. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, CHT has a P/B of 2.19.
These metrics, and several others, help VEON earn a Value grade of A, while CHT has been given a Value grade of D.
VEON has seen stronger estimate revision activity and sports more attractive valuation metrics than CHT, so it seems like value investors will conclude that VEON is the superior option right now.
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