Deutsche Telekom AG (DTEGY)
From Cabot Wealth Advisory 6/24/13 Sign up for free Cabot Wealth Advisory
A good example of a company with a low PEG ratio is Deutsche Telekom AG (DTEGY). The company’s PEG ratio is less than 1.00, and the stock pays a dividend yield of 7.8%, which is an exceptional yield.
Deutsche Telekom AG (DTEGY), based in Bonn, Germany, is Europe's largest communications company and one of the largest communications carriers worldwide. Deutsche Telekom offers a complete range of voice telephony products and services to its customers.
Through T-Mobile, Deutsche Telekom's mobile telephony subsidiary, and through other subsidiaries and investments, the company serves mobile telephony customers worldwide. Its major markets include Germany (57% of sales), the U.S. (24%) and other Europe (24%).
Sales increased just 1% and EPS dipped 12% during the past 12 months ended 3/31/13. Weak demand at T-Mobile USA and soft revenues from landlines in Germany hurt results. However, sales will likely increase 3% and EPS will jump 25% during the next 12 months ending 3/31/14. T-Mobile recently gained approval to sell iPhones for the first time. T-Mobile is also in the process of purchasing MetroPCS, which will greatly improve Deutsche Telekom's position in the U.S.
With a P/E of 15.1, expected EPS growth of 11.0%, and with a low PEG ratio of 0.80, DTEGY shares are clearly undervalued. The dividend yield is 7.8%, which is very attractive and well supported by more than $4.00 per share of cash flow. Shares are medium risk, but have low volatility.
|Deutsche Telekom AG (DTEGY)
Bonn, 53113 Germany
49 228 181 4949
|Index Membership: N/A
Full Time Employees: 229,746