BBSI vs. PAYX: Which Stock Is the Better Value Option?

Group 1 - The article compares Barrett Business Services (BBSI) and Paychex (PAYX) to determine which stock is more attractive to value investors [1] - BBSI has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision trend compared to PAYX, which has a Zacks Rank of 3 (Hold) [1] - The Zacks Rank and Style Scores system are used to identify strong value opportunities, emphasizing companies with positive estimate revisions [1] Group 2 - Value investors typically analyze traditional metrics such as P/E ratio, P/S ratio, earnings yield, and cash flow per share to identify undervalued stocks [2] - BBSI has a forward P/E ratio of 15.38, while PAYX has a forward P/E of 25.91, indicating BBSI may be undervalued [2] - BBSI's PEG ratio is 1.10, compared to PAYX's PEG ratio of 3.31, suggesting BBSI has a better expected EPS growth relative to its valuation [2] Group 3 - BBSI's P/B ratio is 4.39, while PAYX has a P/B of 12.48, further indicating BBSI's relative undervaluation [3] - Based on various valuation metrics, BBSI holds a Value grade of A, whereas PAYX has a Value grade of D, reinforcing BBSI's attractiveness to value investors [3] - BBSI outperforms PAYX in both Zacks Rank and Style Scores, making it a more appealing option for value investors at this time [3]