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SYKE vs. ADP: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Outsourcing stocks have likely encountered both Sykes Enterprises (SYKE - Free Report) and Automatic Data Processing (ADP - Free Report) . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.

Sykes Enterprises and Automatic Data Processing are both sporting a Zacks Rank of # 2 (Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.

SYKE currently has a forward P/E ratio of 14.83, while ADP has a forward P/E of 30.51. We also note that SYKE has a PEG ratio of 1.48. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. ADP currently has a PEG ratio of 2.54.

Another notable valuation metric for SYKE is its P/B ratio of 1.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, ADP has a P/B of 12.70.

Based on these metrics and many more, SYKE holds a Value grade of A, while ADP has a Value grade of D.

Both SYKE and ADP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that SYKE is the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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Sykes Enterprises, Incorporated (SYKE) - free report >>

Automatic Data Processing, Inc. (ADP) - free report >>

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