VEON vs. CHT: Which Stock Is the Better Value Option?
Investors looking for stocks in the Diversified Communication Services sector might want to consider either VEON Ltd. (VEON) or Chunghwa (CHT). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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. and Chunghwa are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that VEON has an improving earnings outlook. But this is only part of the picture for value investors.
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.
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.
VEON currently has a forward P/E ratio of 7.31, while CHT has a forward P/E of 26.29. We also note that VEON has a PEG ratio of 0.58. 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 18.65.
Another notable valuation metric for VEON is its P/B ratio of 2.11. 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, CHT has a P/B of 2.23.
These are just a few of the metrics contributing to VEON's Value grade of A and CHT's Value grade of D.
VEON sticks out from CHT in both our Zacks Rank and Style Scores models, so value investors will likely feel that VEON is the better option right now.
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