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ATTO vs. PAYX: Which Stock Should Value Investors Buy Now?

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Investors with an interest in Outsourcing stocks have likely encountered both Atento (ATTO - Free Report) and Paychex (PAYX - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

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 favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, Atento has a Zacks Rank of #1 (Strong Buy), while Paychex has a Zacks Rank of #2 (Buy). Investors should feel comfortable knowing that ATTO likely has seen a stronger improvement to its earnings outlook than PAYX has recently. 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 highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

ATTO currently has a forward P/E ratio of 21.46, while PAYX has a forward P/E of 31.93. We also note that ATTO has a PEG ratio of 1.79. 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. PAYX currently has a PEG ratio of 3.99.

Another notable valuation metric for ATTO is its P/B ratio of 6.33. 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, PAYX has a P/B of 13.12.

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

ATTO is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that ATTO is likely the superior value option right now.


In-Depth Zacks Research for the Tickers Above


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Atento S.A. (ATTO) - free report >>

Paychex, Inc. (PAYX) - free report >>

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