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G vs. ADP: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Outsourcing sector have probably already heard of Genpact (G - Free Report) and Automatic Data Processing (ADP - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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.
Right now, both Genpact and Automatic Data Processing are sporting a Zacks Rank of # 2 (Buy). 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 only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
G currently has a forward P/E ratio of 17.14, while ADP has a forward P/E of 30.35. We also note that G has a PEG ratio of 1.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ADP currently has a PEG ratio of 2.53.
Another notable valuation metric for G is its P/B ratio of 4.94. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ADP has a P/B of 31.47.
These are just a few of the metrics contributing to G's Value grade of B and ADP's Value grade of C.
Both G and ADP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that G is the superior value option right now.
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G vs. ADP: Which Stock Is the Better Value Option?
Investors interested in stocks from the Outsourcing sector have probably already heard of Genpact (G - Free Report) and Automatic Data Processing (ADP - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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 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.
Right now, both Genpact and Automatic Data Processing are sporting a Zacks Rank of # 2 (Buy). 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 only part of the picture for value investors.
Value investors also tend to look at a number of traditional, tried-and-true figures to help them find stocks that they believe are undervalued at their 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.
G currently has a forward P/E ratio of 17.14, while ADP has a forward P/E of 30.35. We also note that G has a PEG ratio of 1.41. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. ADP currently has a PEG ratio of 2.53.
Another notable valuation metric for G is its P/B ratio of 4.94. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, ADP has a P/B of 31.47.
These are just a few of the metrics contributing to G's Value grade of B and ADP's Value grade of C.
Both G and ADP are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that G is the superior value option right now.