Yahoo Finance SYKE vs. ADP: Which Stock Is the Better Value Option?
Investors with an interest in Outsourcing stocks have likely encountered both Sykes Enterprises (SYKE) and Automatic Data Processing (ADP). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.
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 proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits.
Sykes Enterprises and Automatic Data Processing are sporting Zacks Ranks of #2 (Buy) and #3 (Hold), respectively, right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that SYKE has an improving earnings outlook. 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.
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.
SYKE currently has a forward P/E ratio of 9.78, while ADP has a forward P/E of 18.35. We also note that SYKE has a PEG ratio of 0.98. 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 1.53.
Another notable valuation metric for SYKE is its P/B ratio of 1.11. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, ADP has a P/B of 9.02.
Based on these metrics and many more, SYKE holds a Value grade of B, while ADP has a Value grade of C.
SYKE sticks out from ADP in both our Zacks Rank and Style Scores models, so value investors will likely feel that SYKE is the better option right now.
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Sykes Enterprises, Incorporated (SYKE) : Free Stock Analysis Report
Automatic Data Processing, Inc. (ADP) : Free Stock Analysis Report
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