We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
BBSI vs. PAYX: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
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 is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Barrett Business Services has a Zacks Rank of #1 (Strong Buy), while Paychex has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BBSI has an improving earnings outlook. 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.
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.
BBSI currently has a forward P/E ratio of 16.65, while PAYX has a forward P/E of 25.51. We also note that BBSI has a PEG ratio of 1.19. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PAYX currently has a PEG ratio of 3.25.
Another notable valuation metric for BBSI is its P/B ratio of 4.34. 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, PAYX has a P/B of 12.27.
Based on these metrics and many more, BBSI holds a Value grade of A, while PAYX has a Value grade of C.
BBSI sticks out from PAYX in both our Zacks Rank and Style Scores models, so value investors will likely feel that BBSI is the better option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
BBSI vs. PAYX: Which Stock Should Value Investors Buy Now?
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 is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Barrett Business Services has a Zacks Rank of #1 (Strong Buy), while Paychex has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BBSI has an improving earnings outlook. 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.
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.
BBSI currently has a forward P/E ratio of 16.65, while PAYX has a forward P/E of 25.51. We also note that BBSI has a PEG ratio of 1.19. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. PAYX currently has a PEG ratio of 3.25.
Another notable valuation metric for BBSI is its P/B ratio of 4.34. 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, PAYX has a P/B of 12.27.
Based on these metrics and many more, BBSI holds a Value grade of A, while PAYX has a Value grade of C.
BBSI sticks out from PAYX in both our Zacks Rank and Style Scores models, so value investors will likely feel that BBSI is the better option right now.