KELYA vs. RHI: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Staffing Firms sector have probably already heard of Kelly Services (KELYA) and Robert Half (RHI). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
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.
Currently, Kelly Services has a Zacks Rank of #1 (Strong Buy), while Robert Half has a Zacks Rank of #5 (Strong Sell). This means that KELYA's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is only part of the picture for value investors.
Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their 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.
KELYA currently has a forward P/E ratio of 10.70, while RHI has a forward P/E of 11.92. We also note that KELYA has a PEG ratio of 0.82. 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. RHI currently has a PEG ratio of 3.46.
Another notable valuation metric for KELYA is its P/B ratio of 0.58. 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, RHI has a P/B of 5.77.
Based on these metrics and many more, KELYA holds a Value grade of B, while RHI has a Value grade of C.
KELYA is currently sporting an improving earnings outlook, which makes it stick out in our Zacks Rank model. And, based on the above valuation metrics, we feel that KELYA is likely the superior value option right now.
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Kelly Services, Inc. (KELYA) : Free Stock Analysis Report
Robert Half International Inc. (RHI) : Free Stock Analysis Report
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