VIV vs. TLSYY: Which Stock Is the Better Value Option?

Investors interested in Diversified Communication Services stocks are likely familiar with Telefonica Brasil (VIV) and Telstra Corp. (TLSYY). But which of these two stocks presents investors with the better value opportunity right now? 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.

Telefonica Brasil and Telstra Corp. are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that VIV likely has seen a stronger improvement to its earnings outlook than TLSYY has recently. But this is just one factor that value investors are interested in.

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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

VIV currently has a forward P/E ratio of 17.71, while TLSYY has a forward P/E of 22.78. We also note that VIV has a PEG ratio of 2.30. 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. TLSYY currently has a PEG ratio of 2.71.

Another notable valuation metric for VIV is its P/B ratio of 0.90. 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, TLSYY has a P/B of 2.37.

These are just a few of the metrics contributing to VIV's Value grade of B and TLSYY's Value grade of C.

VIV stands above TLSYY thanks to its solid earnings outlook, and based on these valuation figures, we also feel that VIV is the superior value option right now.

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Telefonica Brasil S.A. (VIV) : Free Stock Analysis Report
 
Telstra Corp. (TLSYY) : Free Stock Analysis Report
 
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