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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 companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Barrett Business Services has a Zacks Rank of #2 (Buy), while Paychex has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BBSI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BBSI currently has a forward P/E ratio of 12.96, while PAYX has a forward P/E of 30.22. We also note that BBSI has a PEG ratio of 0.93. 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 4.03.
Another notable valuation metric for BBSI is its P/B ratio of 3.31. 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 14.65.
These are just a few of the metrics contributing to BBSI's Value grade of A and PAYX's Value grade of D.
BBSI 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 BBSI is likely 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 companies is the best option for those looking for undervalued stocks? Let's 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Barrett Business Services has a Zacks Rank of #2 (Buy), while Paychex has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that BBSI is likely seeing its earnings outlook improve to a greater extent. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
BBSI currently has a forward P/E ratio of 12.96, while PAYX has a forward P/E of 30.22. We also note that BBSI has a PEG ratio of 0.93. 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 4.03.
Another notable valuation metric for BBSI is its P/B ratio of 3.31. 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 14.65.
These are just a few of the metrics contributing to BBSI's Value grade of A and PAYX's Value grade of D.
BBSI 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 BBSI is likely the superior value option right now.