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BBSI vs. PAYX: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Outsourcing sector have probably already heard of Barrett Business Services (BBSI - Free Report) and Paychex (PAYX - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Barrett Business Services and Paychex are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BBSI currently has a forward P/E ratio of 14.93, while PAYX has a forward P/E of 35.25. We also note that BBSI has a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PAYX currently has a PEG ratio of 4.70.
Another notable valuation metric for BBSI is its P/B ratio of 2.76. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PAYX has a P/B of 14.82.
These are just a few of the metrics contributing to BBSI's Value grade of A and PAYX's Value grade of F.
Both BBSI and PAYX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BBSI is the superior value option right now.
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BBSI vs. PAYX: Which Stock Is the Better Value Option?
Investors interested in stocks from the Outsourcing sector have probably already heard of Barrett Business Services (BBSI - Free Report) and Paychex (PAYX - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Barrett Business Services and Paychex are holding a Zacks Rank of # 2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is just one factor that value investors are interested in.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when a company is undervalued at its current share price levels.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
BBSI currently has a forward P/E ratio of 14.93, while PAYX has a forward P/E of 35.25. We also note that BBSI has a PEG ratio of 1.24. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. PAYX currently has a PEG ratio of 4.70.
Another notable valuation metric for BBSI is its P/B ratio of 2.76. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, PAYX has a P/B of 14.82.
These are just a few of the metrics contributing to BBSI's Value grade of A and PAYX's Value grade of F.
Both BBSI and PAYX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that BBSI is the superior value option right now.