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 Friday, January 24, 2025. 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.

Chunghwa Telecom Co., Ltd.’s Value Grade

Value Grade:

Chunghwa Telecom Co., Ltd., together with its subsidiaries, provides telecommunication services in Taiwan and internationally. It operates through Consumer Business, Enterprise Business, International Business, and Others segments. The company offers local, domestic long distance, and international long distance fixed-line telephone services; mobile services such as prepaid and postpaid plans; broadband plans; and internet and data services. Chunghwa Telecom Co., Ltd. was incorporated in 1996 and is headquartered in Taipei City, Taiwan.

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.

Chunghwa Telecom Co., Ltd. has a Value Score of 69, which is considered to be undervalued.

When you look at Chunghwa Telecom Co., Ltd.’s price-to-sales ratio at 1.36 compared to the industry median at 0.71, this company has a higher price relative to revenue compared to its peers. This could make Chunghwa Telecom Co., Ltd.’s stock less attractive for value investors.

Chunghwa Telecom Co., Ltd.’s price-earnings ratio is 265.80 compared to the industry median at 25.05. This means it has a higher share price relative to earnings compared to its peers. This could make Chunghwa Telecom Co., Ltd. less attractive for value investors.

Now, let’s assess Chunghwa Telecom Co., Ltd.’s EV/EBITDA ratio, also known as enterprise multiple. At 11.9, when compared to the industry median of 7.3, 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. Chunghwa Telecom Co., Ltd.’s shareholder yield is higher than its industry median ratio of 3.05%. 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. Chunghwa Telecom Co., Ltd.’s price-to-book ratio is lower than its industry median ratio of 0.95. This could make Chunghwa Telecom Co., Ltd. more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at Chunghwa Telecom Co., Ltd.’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. Chunghwa Telecom Co., Ltd.’s price-to-free-cash-flow ratio is lower than its industry median ratio of 6.50. This could make Chunghwa Telecom Co., Ltd. more attractive because the lower P/FCF ratio indicates that Chunghwa Telecom Co., Ltd. is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

KT Corporation’s Value Grade

Value Grade:

KT Corporation provides integrated telecommunications and platform services in Korea and internationally. The company offers mobile voice and data telecommunications services based on 5G, 4G LTE and 3G W-CDMA technology; fixed-line telephone services, including local, domestic long-distance, international long-distance, and voice over Internet protocol telephone services, as well as interconnection services; broadband Internet access service and other Internet-related services; and data communication services, such as fixed-line and leased line services, as well as broadband Internet connection services. It also provides media and content services, including IPTV, satellite TV, digital music, e-commerce, online advertising consulting, and web comics and novels services; and credit card processing and other financial services. In addition, the company offers information technology and network services, and satellite services; sells handsets and miscellaneous telecommunications equipment; develops and sells residential units and commercial real estate; and rents real estate properties. Further, it maintains public telephones; offers security, B2C and B2B, investment fund, software development and data processing, value added network, call center, system integration and maintenance, marketing, PCS distribution, truck transportation and trucking arrangement business, cloud system implementation, satellite communication network, installation and management, and data center development and related services. Additionally, the company is involved in the Internet banking ASP and security solutions, residential building development and supply, sports team management, technology business finance, and submarine cable construction and maintenance businesses. The company was formerly known as Korea Telecom Corp. and changed its name to KT Corporation in March 2002. KT Corporation was founded in 1981 and is headquartered in Seongnam-si, South Korea.

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.

KT Corporation has a Value Score of 93, which is considered to be undervalued.

KT Corporation’s price-earnings ratio is 4.8 compared to the industry median at 25.1. This means that it has a lower price relative to its earnings compared to its peers. This makes KT Corporation more attractive for value investors.

You can read more about KT Corporation’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.

TELUS Corporation’s Value Grade

Value Grade:

TELUS Corporation, together with its subsidiaries, provides a range of telecommunications and information technology products and services in Canada. It operates through Technology Solutions and Digitally-Led Customer Experiences segments. The Technology Solutions segment offers a range of telecommunications products and services; network services; healthcare services; mobile technologies equipment; data services, such as internet protocol; television; hosting, managed information technology, and cloud-based services; software, data management, and data analytics-driven smart food-chain and consumer goods technologies; home and business security; healthcare software and technology solutions; and voice and other telecommunications services, as well as mobile and fixed voice and data telecommunications services and products. The Digitally-Led Customer Experiences segment provides digital customer experience and digital-enablement transformation solutions, including artificial intelligence and content management solutions. The company was formerly known as TELUS Communications Inc. and changed its name to TELUS Corporation in February 2005. TELUS Corporation was incorporated in 1998 and is based in Vancouver, Canada.

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.

TELUS Corporation has a Value Score of 62, which is considered to be undervalued.

TELUS Corporation’s price-earnings ratio is 30.6 compared to the industry median at 25.1. This means that it has a higher price relative to its earnings compared to its peers. This makes TELUS Corporation less attractive for value investors.

TELUS Corporation’s price-to-book ratio is lower than its peers. This could make TELUS Corporation more attractive for value investors when compared to the industry median at 0.95.

You can read more about TELUS Corporation’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 73, which is considered to be undervalued.

Verizon Communications Inc.’s price-earnings ratio is 16.9 compared to the industry median at 25.1. 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 0.95.

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.

• Chunghwa Telecom Co., Ltd. stock has a Value Grade of B.
• KT Corporation stock has a Value Grade of A.
• TELUS Corporation stock has a Value Grade of B.
• 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 Friday, January 24
• 3 Undervalued Diversified Telecommunication Services Stocks for Thursday, January 23
• Why AST SpaceMobile, Inc.’s (ASTS) Stock Is Down 11.96%
• 3 Undervalued Diversified Telecommunication Services Stocks for Wednesday, January 22

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