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BBSI vs. PAYX: Which Stock Should Value Investors Buy Now?
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Investors looking for stocks in the Outsourcing sector might want to consider either Barrett Business Services (BBSI - Free Report) or 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.
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.
Barrett Business Services and Paychex are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BBSI likely has seen a stronger improvement to its earnings outlook than PAYX has recently. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BBSI currently has a forward P/E ratio of 15.56, while PAYX has a forward P/E of 25.49. We also note that BBSI has a PEG ratio of 1.11. 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 3.38.
Another notable valuation metric for BBSI is its P/B ratio of 4.02. 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 11.53.
These metrics, and several others, help BBSI earn a Value grade of A, while PAYX has been given a 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 Should Value Investors Buy Now?
Investors looking for stocks in the Outsourcing sector might want to consider either Barrett Business Services (BBSI - Free Report) or 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.
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.
Barrett Business Services and Paychex are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that BBSI likely has seen a stronger improvement to its earnings outlook than PAYX has recently. 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 grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use.
BBSI currently has a forward P/E ratio of 15.56, while PAYX has a forward P/E of 25.49. We also note that BBSI has a PEG ratio of 1.11. 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 3.38.
Another notable valuation metric for BBSI is its P/B ratio of 4.02. 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 11.53.
These metrics, and several others, help BBSI earn a Value grade of A, while PAYX has been given a 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.