Investors looking for stocks in the Outsourcing sector might want to consider either Genpact (G) or Paychex (PAYX). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.

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 emphasizes companies with positive estimate revision trends, and our Style Scores highlight stocks with specific traits.

Currently, Genpact has a Zacks Rank of #2 (Buy), while Paychex has a Zacks Rank of #4 (Sell). Investors should feel comfortable knowing that G 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 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.

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.

G currently has a forward P/E ratio of 14.12, while PAYX has a forward P/E of 29.01. We also note that G has a PEG ratio of 1.44. 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 3.97.

Another notable valuation metric for G is its P/B ratio of 3.40. 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, PAYX has a P/B of 13.51.

These are just a few of the metrics contributing to G's Value grade of A and PAYX's Value grade of D.

G stands above PAYX thanks to its solid earnings outlook, and based on these valuation figures, we also feel that G is the superior value option right now.

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Genpact Limited (G) : Free Stock Analysis Report

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