China Mobile Ltd. (CHL) trades at about the same price-earnings multiple as U.S. based companies like Verizon Communications Inc. (VZ) and AT&T Inc. (T), but higher growth rates might make its stock a much better deal relative to its peers abroad.

China Mobile Ltd. [[CHL]], a leading Chinese telecom provider, is trading with a price-earnings multiple of just 12.42x despite posting net income growth of approximately 29.5%. This compares to 16.4% growth at its closest U.S.-based competitor Verizon Communications [[VZ]], which trades at a higher price-earnings multiple of 13.74x.

Using the price-earnings to growth ratio (PEG ratio), China Mobile trades at just 0.42 compared to 0.83, which suggests that it could be dramatically undervalued. In fact, a market-standard PEG ratio of 1.0 would yield a stock price of more than double its current price of $50.22. And if it were to trade at Verizon’s PEG ratio, its share price would be around $98.91.

China’s economy is also expected to grow much faster than the U.S. economy over the next several years. The Organization for Economic Cooperation and Development raised its forecast for China’s economic growth to 7.7% amid its stimulus measures in place. Meanwhile, domestic spending is expected to ramp up heavily as the country becomes richer.

As in the United States, telecom growth in China will likely come from value-added services like data. Revenue from these businesses jumped 23.8%, from 2007 to $16.6 billion, at China Mobile and represents one of its fastest growing segments. Meanwhile, SMS and video remain two other key areas that will drive growth over the next several years.

In the end, China Mobile remains an undervalued growth play by many measures. The stock trades at a valuation below that of comparable U.S. corporations and has strong growth prospects with over 488 million subscribers and counting. As a result, U.S. investors in more traditional telecoms may want to take a look at this strong Chinese play to diversify their portfolio.