KELYA or RHI: Which Is the Better Value Stock Right Now?
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Investors with an interest in Staffing Firms stocks have likely encountered both Kelly Services (KELYA) and Robert Half (RHI). 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.
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.
Right now, Kelly Services is sporting 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 just one factor that value investors are interested in.
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.
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.
KELYA currently has a forward P/E ratio of 8.12, while RHI has a forward P/E of 23.36. We also note that KELYA has a PEG ratio of 0.62. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. RHI currently has a PEG ratio of 5.67.
Another notable valuation metric for KELYA is its P/B ratio of 0.55. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. By comparison, RHI has a P/B of 4.23.
These metrics, and several others, help KELYA earn a Value grade of A, while RHI has been given 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 Inc. (RHI) : Free Stock Analysis Report