Investors interested in Diversified Communication Services stocks are likely familiar with Deutsche Telekom AG (DTEGY) and Telus (TU). But which of these two companies is the best option for those looking for undervalued stocks? 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 Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Deutsche Telekom AG and Telus are sporting Zacks Ranks of #1 (Strong 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 DTEGY has an improving earnings outlook. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.

DTEGY currently has a forward P/E ratio of 15.95, while TU has a forward P/E of 21. We also note that DTEGY has a PEG ratio of 1.41. 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. TU currently has a PEG ratio of 4.99.

Another notable valuation metric for DTEGY is its P/B ratio of 1.72. 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, TU has a P/B of 1.84.

Based on these metrics and many more, DTEGY holds a Value grade of B, while TU has a Value grade of C.

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

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Deutsche Telekom AG (DTEGY) : Free Stock Analysis Report

TELUS Corporation (TU) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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