Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 4 stocks made the list for top value stocks in the Diversified Telecommunication Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Diversified Telecommunication Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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4 Undervalued Diversified Telecommunication Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 4 undervalued stocks in the Diversified Telecommunication Services industry for Wednesday, November 13, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Diversified Telecommunication Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Consolidated Communications Holdings, Inc.’s Value Grade

Value Grade:

Consolidated Communications Holdings, Inc., together with its subsidiaries, provides broadband and business communication solutions for consumer, commercial, and carrier channels in the United States. It offers high-speed broadband Internet access, SIP trunking, and voice over Internet protocol (VoIP) phone services; commercial data connectivity services in various markets, including Ethernet services, private line data services, software defined wide area network, and multi-protocol label switching services; networking services; cloud-based services; and data center and disaster recovery solutions. The company also provides voice services, such as local phone and long-distance services; and high-speed fiber data transmission services to regional and national interexchange; and wireless carriers, including Ethernet, cellular backhaul, dark fiber, and colocation services. In addition, it sells business equipment, as well as offers related hardware and maintenance support, video, and other miscellaneous services. Further, the company offers video services comprising high-definition television, digital video recorders (DVR), and/or a whole home DVR; and in-demand streaming TV services that provide endless entertainment options. Additionally, it provides network access services that include interstate and intrastate switched access, network special access, and end user access; and telephone directory publishing, video advertising, billing and support, and other miscellaneous services. The company was founded in 1894 and is headquartered in Mattoon, Illinois.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Consolidated Communications Holdings, Inc. has a Value Score of 72, which is considered to be undervalued.

When you look at Consolidated Communications Holdings, Inc.’s price-to-sales ratio at 0.48 compared to the industry median at 1.04, this company has a lower price relative to revenue compared to its peers. This could make Consolidated Communications Holdings, Inc.’s stock more attractive for value investors.

Now, let’s assess Consolidated Communications Holdings, Inc.’s EV/EBITDA ratio, also known as enterprise multiple. At 11.4, when compared to the industry median of 7.1, the company may be considered overvalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Consolidated Communications Holdings, Inc.’s shareholder yield is lower than its industry median ratio of 1.10%. Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. Consolidated Communications Holdings, Inc.’s price-to-book ratio is lower than its industry median ratio of 1.06. This could make Consolidated Communications Holdings, Inc. more attractive to investors looking for a new addition to their portfolio.

Lumen Technologies, Inc.’s Value Grade

Value Grade:

Lumen Technologies, Inc., a facilities-based technology and communications company, provides various integrated products and services to business and residential customers in the United States and internationally. The company operates in two segments, Business and Mass Markets. It offers dark fiber, edge cloud services, internet protocol, managed security, software-defined wide area networks, secure access service edge, unified communications and collaboration, and optical wavelengths services; ethernet and VPN data networks services; and legacy services to manage cash flow, including time division multiplexing voice, private line, and other legacy services, as well as sells communication equipment, and IT solutions. The company also provides high speed and lower speed broadband service to residential and small business customers; local and long-distance voice services, professional services, and other ancillary services; and federal broadband and state support programs. It serves its products and services under the Lumen, Quantum Fiber, and CenturyLink brands. The company was formerly known as CenturyLink, Inc. and changed its name to Lumen Technologies, Inc. in September 2020. Lumen Technologies, Inc. was incorporated in 1968 and is headquartered in Monroe, Louisiana.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Lumen Technologies, Inc. has a Value Score of 61, which is considered to be undervalued.

Lumen Technologies, Inc.’s price-to-book ratio is lower than its peers. This could make Lumen Technologies, Inc. more attractive for value investors when compared to the industry median at 1.06.

You can read more about Lumen Technologies, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Telefônica Brasil S.A.’s Value Grade

Value Grade:

Telefônica Brasil S.A., together with its subsidiaries, operates as a mobile telecommunications company in Brazil. Its fixed line services portfolio includes local, domestic long-distance, and international long-distance calls; and mobile portfolio comprises voice and broadband internet access through 3G, 4G, 4.5G, and 5G, as well as value-added and wireless roaming services. The company also offers data services, including broadband and mobile data services. In addition, it provides pay TV services through IPTV technologies; network services, such as rental of facilities; other services; wholesale services, including interconnection services to users of other network providers; and digital services, such as entertainment, cloud, and security and financial services. Further, the company offers multimedia communication services, which include audio, data, voice and other sounds, images, texts, and other information, as well as sells devices, such as smartphones, broadband USB modems, and other devices. Additionally, it provides telecommunications solutions and IT support to various industries, such as retail, manufacturing, services, financial institutions, government, etc. It markets and sells its solutions through own stores, dealers, retail and distribution channels, door-to-door sales, and outbound tele sales. The company was formerly known as Telecomunicações de São Paulo S.A. - TELESP and changed its name to Telefônica Brasil S.A. in October 2011. The company was incorporated in 1998 and is headquartered in São Paulo, Brazil.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Telefônica Brasil S.A. has a Value Score of 98, which is considered to be undervalued.

Telefônica Brasil S.A.’s price-earnings ratio is 15.1 compared to the industry median at 26.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Telefônica Brasil S.A. more attractive for value investors.

Telefônica Brasil S.A.’s price-to-book ratio is higher than its peers. This could make Telefônica Brasil S.A. less attractive for value investors when compared to the industry median at 1.06.

You can read more about Telefônica Brasil S.A.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Verizon Communications Inc.’s Value Grade

Value Grade:

Verizon Communications Inc., through its subsidiaries, engages in the provision of communications, technology, information, and entertainment products and services to consumers, businesses, and governmental entities worldwide. It operates in two segments, Verizon Consumer Group (Consumer) and Verizon Business Group (Business). The Consumer segment provides wireless services across the wireless networks in the United States under the Verizon and TracFone brands and through wholesale and other arrangements; and fixed wireless access (FWA) broadband through its wireless networks, as well as related equipment and devices, such as smartphones, tablets, smart watches, and other wireless-enabled connected devices. The segment also offers wireline services in the Mid-Atlantic and Northeastern United States, as well as Washington D.C. through its fiber-optic network, Verizon Fios product portfolio, and a copper-based network. The Business segment provides wireless and wireline communications services and products, including FWA broadband, data, video and conferencing, corporate networking, security and managed network, local and long-distance voice, and network access services to deliver various IoT services and products to businesses, government customers, and wireless and wireline carriers in the United States and internationally. The company was formerly known as Bell Atlantic Corporation and changed its name to Verizon Communications Inc. in June 2000. Verizon Communications Inc. was incorporated in 1983 and is headquartered in New York, New York.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Verizon Communications Inc. has a Value Score of 72, which is considered to be undervalued.

Verizon Communications Inc.’s price-earnings ratio is 17.5 compared to the industry median at 26.2. This means that it has a lower price relative to its earnings compared to its peers. This makes Verizon Communications Inc. more attractive for value investors.

Verizon Communications Inc.’s price-to-book ratio is lower than its peers. This could make Verizon Communications Inc. more attractive for value investors when compared to the industry median at 1.06.

You can read more about Verizon Communications Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Diversified Telecommunication Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Diversified Telecommunication Services stocks as well as other industrys.

Choosing Which of the 4 Best Diversified Telecommunication Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Consolidated Communications Holdings, Inc. stock has a Value Grade of B.
• Lumen Technologies, Inc. stock has a Value Grade of B.
• Telefônica Brasil S.A. stock has a Value Grade of A.
• Verizon Communications Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 4 undervalued stocks in the Diversified Telecommunication Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Diversified Telecommunication Services Stocks

Want to learn more about Diversified Telecommunication Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 4 Undervalued Diversified Telecommunication Services Stocks for Wednesday, November 13
• 3 Undervalued Diversified Telecommunication Services Stocks for Monday, November 11
• 4 Undervalued Diversified Telecommunication Services Stocks for Friday, November 08
• 4 Undervalued Diversified Telecommunication Services Stocks for Thursday, November 07

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