BT Group (LSE:BT-A) has been one of many FTSE 100‘s best performers in May. Yet on paper, it still looks like one of the index’s greatest worth shares.

At 126.3p per share, the telecoms large now trades on a ahead price-to-earnings (P/E) ratio of 6.7 occasions. That is far beneath the Footsie common of 11 occasions.

In the meantime, the potential dividend yield on BT shares stands at 6.1%. This trumps the UK blue-chip common of three.5% by an enormous margin.

To crown issues off, the agency’s price-to-book (P/B) ratio is at present 0.9. At beneath 1, this implies the corporate trades at a reduction to the worth of its belongings.

Blended outcomes

In fact, the FTSE 100’s made up of quite a lot of completely different shares spanning quite a lot of sectors.

Given present issues within the telecoms sector — from the pressures created by excessive rates of interest and difficult financial circumstances, to massive capex payments and regulatory uncertainty — it’s a good suggestion to check how BT’s share price compares to that of its main {industry} friends.

As you possibly can see from the desk, the agency pleasingly presents industry-beating worth relative to earnings. Its ahead P/E ratio of beneath 7 occasions is beneath a mean of 9.8 occasions for its peer group. It’s additionally the smallest amongst this cluster of shares.

That mentioned, BT’s shares don’t look as enticing from a price perspective on the subject of dividends. Because the chart beneath reveals, it has the fifth largest yield, behind (in descending order) Vodafone, Verizon, Orange and AT&T.

Having mentioned that, the 6.1% ahead dividend yield is fairly near the 6.5% sector common.

The decision

All issues thought-about, I don’t consider BT shares present enticing sufficient worth for me to take a position. Some shares carry low valuations based mostly on their poor progress prospects and excessive danger profiles. It’s an outline I believe suits this FTSE 100 inventory completely.

On the constructive aspect, telecoms firms ought to obtain a lift as our lives grow to be more and more digitalised. BT’s big fibre-laying programme might put it in a robust place to capitalise on this chance too.

However in addition to dealing with {industry} pressures, the agency’s concentrate on the weak UK economic system leaves it in peril of underperforming its internationally centered friends. This definitely explains why it trades on a decrease P/E ratio to these different firms I’ve talked about.

Newest financials confirmed revenues rise simply 1% within the 12 months to March. Income additionally plummeted 31% resulting from a writedown within the worth of the Enterprise division.

With Britain dealing with a chronic interval of weak progress, there’s a superb probability BT’s share price might stay underneath stress. So whereas it seems to be low-cost on paper, I’d a lot somewhat purchase different FTSE 100 worth shares at this time.