Monday, September 05, 2011

Are Stocks Undervalued? $NFLX vs. $VOD

imageMark Hulbert asks if stocks are undervalued.

Valuation is always such an interesting metric, as it is based on earnings and optimism.  If folks are more excited about Netflix compared to Vodafone, demand for Netflix pushes up valuation.  Meanwhile, Vodafone keeps expanding and cranking out a 7% dividend.  I don’t want to argue growth vs. value, but PE multiples are what they are – based on enthusiasm.

Netflix PE is 54.08.

Vodafone PE is 10.74.

Want the 7% dividend?  Well, look at the 5 year chart.


Woo, no wonder folks have been a bit excited about Netflix.  But this is a view of the past.  Going forward, would you rather own $NFLX or $VOD?

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