Stock of the Day

November 8, 2021

Chunghwa Telecom (CHT)

$39.05
+$0.19 (+0.5%)
Market Cap: $30.15B

About Chunghwa Telecom

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.

Chunghwa Telecom Bull Case

Here are some ways that investors could benefit from investing in Chunghwa Telecom Co., Ltd.:

  • Chunghwa Telecom Co., Ltd. reported a quarterly earnings per share of $0.36, indicating solid profitability which can attract investors looking for stable returns.
  • The company has a net margin of 16.09%, showcasing its ability to convert revenue into profit effectively, which is a positive indicator for potential investors.
  • With a current stock price of $38.87, the stock has shown resilience and potential for growth, making it an attractive option for investors seeking value.
  • The low debt-to-equity ratio of 0.06 suggests that Chunghwa Telecom Co., Ltd. is not heavily reliant on debt for financing, reducing financial risk for investors.
  • Analysts have recently upgraded the stock from a "hold" to a "buy" rating, indicating positive sentiment and potential for price appreciation in the near term.

Chunghwa Telecom Bear Case

Investors should be bearish about investing in Chunghwa Telecom Co., Ltd. for these reasons:

  • The company has a relatively high P/E ratio of 26.62, which may suggest that the stock is overvalued compared to its earnings, potentially deterring value-focused investors.
  • Chunghwa Telecom Co., Ltd. has a PEG ratio of 19.82, indicating that the stock's price may not be justified by its expected earnings growth, which could be a red flag for growth investors.
  • Despite a stable market cap of $30.15 billion, the stock's performance may be limited by market saturation in the telecommunications sector, affecting long-term growth prospects.
  • The beta of 0.20 indicates low volatility, which may be less appealing to investors seeking high-risk, high-reward opportunities.
  • Recent trading volumes have been below average, which could indicate a lack of investor interest and potential liquidity issues for those looking to enter or exit positions quickly.

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