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G vs. PAYX: Which Stock Is the Better Value Option?
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Investors with an interest in Outsourcing stocks have likely encountered both Genpact (G - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Genpact 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. However, value investors will care about much more than just this.
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.
G currently has a forward P/E ratio of 15.09, while PAYX has a forward P/E of 25.49. We also note that G has a PEG ratio of 1.61. 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. PAYX currently has a PEG ratio of 3.40.
Another notable valuation metric for G is its P/B ratio of 4.50. 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 11.59.
These are just a few of the metrics contributing to G's Value grade of B and PAYX's Value grade of C.
Both G and PAYX 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. PAYX: Which Stock Is the Better Value Option?
Investors with an interest in Outsourcing stocks have likely encountered both Genpact (G - 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.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Currently, both Genpact 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. However, value investors will care about much more than just this.
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.
G currently has a forward P/E ratio of 15.09, while PAYX has a forward P/E of 25.49. We also note that G has a PEG ratio of 1.61. 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. PAYX currently has a PEG ratio of 3.40.
Another notable valuation metric for G is its P/B ratio of 4.50. 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 11.59.
These are just a few of the metrics contributing to G's Value grade of B and PAYX's Value grade of C.
Both G and PAYX are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that G is the superior value option right now.