Yahoo Finance CGEMY vs. ADP: Which Stock Is the Better Value Option?
Investors looking for stocks in the Outsourcing sector might want to consider either Cap Gemini SA (CGEMY) or Automatic Data Processing (ADP). 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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Cap Gemini SA and Automatic Data Processing are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. Investors should feel comfortable knowing that CGEMY likely has seen a stronger improvement to its earnings outlook than ADP has recently. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels.
The Style Score Value grade factors in a variety of key fundamental metrics, including the popular P/E ratio, P/S ratio, earnings yield, cash flow per share, and a number of other key stats that are commonly used by value investors.
CGEMY currently has a forward P/E ratio of 14.86, while ADP has a forward P/E of 26.35. We also note that CGEMY has a PEG ratio of 1.72. 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 2.20.
Another notable valuation metric for CGEMY is its P/B ratio of 3.04. 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, ADP has a P/B of 24.05.
These metrics, and several others, help CGEMY earn a Value grade of A, while ADP has been given a Value grade of C.
CGEMY stands above ADP thanks to its solid earnings outlook, and based on these valuation figures, we also feel that CGEMY is the superior value option right now.
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Cap Gemini SA (CGEMY) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
