Yahoo Finance ATTO vs. ADP: Which Stock Is the Better Value Option?
Investors interested in Outsourcing stocks are likely familiar with Atento (ATTO) and Automatic Data Processing (ADP). But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Right now, Atento is sporting a Zacks Rank of #2 (Buy), while Automatic Data Processing 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 ATTO has an improving earnings outlook. But this is only part of the picture for value investors.
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.
ATTO currently has a forward P/E ratio of 2.83, while ADP has a forward P/E of 23.05. We also note that ATTO has a PEG ratio of 0.28. 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. ADP currently has a PEG ratio of 1.92.
Another notable valuation metric for ATTO is its P/B ratio of 0.22. 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 11.23.
Based on these metrics and many more, ATTO holds a Value grade of A, while ADP has a Value grade of C.
ATTO has seen stronger estimate revision activity and sports more attractive valuation metrics than ADP, so it seems like value investors will conclude that ATTO is the superior option right now.
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Atento S.A. (ATTO) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
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