China Mobile Ltd. (ADR) (CHL) Gets the Best of Both Worlds

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Solid growth, but no value

AT&T and Verizon are great companies with awesome growth prospects and renewed innovation. Even so, their current prices don’t justify them as investments. Verizon’s price relative to its earnings is 94, which is huge given that it is considerably tapering its growth forecasts for the coming years. AT&T’s acquisition plans and solid growth numbers in second quarter might justify its price-to-earnings ratio of 27 if its future projections weren’t so sub-par. The company holds a price-to-earnings growth ratio of 2.37, which is significantly higher than Verizon’s.

Bet on future growth, win now

China Mobile Ltd. (ADR) (NYSE:CHL)’s price-to-earnings ratio of 10.3 and 4.12% dividend provide a great opportunity to invest. The mobile carrier has well-established operations and solid growth prospects on the horizon. The company’s heavy investment in 2013 will certainly hurt its earnings per share in the short term, but the company doesn’t have much downside at this point. Grabbing China Mobile’s dividend while waiting for long-term progress is the best play I see in the telecom market right now.

The article China Mobile Gets the Best of Both Worlds originally appeared on Fool.com and is written by Ryan Gilbert.

Ryan Gilbert has no position in any stocks mentioned. The Motley Fool owns shares of China Mobile. Ryan is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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