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KBH vs. MDC: Which Stock Is the Better Value Option?
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Investors with an interest in Building Products - Home Builders stocks have likely encountered both KB Home (KBH - Free Report) and M.D.C. Holdings, Inc. . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
KB Home and M.D.C. Holdings, Inc. are both sporting a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
KBH currently has a forward P/E ratio of 8.15, while MDC has a forward P/E of 8.17. We also note that KBH has a PEG ratio of 0.39. 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. MDC currently has a PEG ratio of 0.54.
Another notable valuation metric for KBH is its P/B ratio of 1.41. 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, MDC has a P/B of 1.75.
These are just a few of the metrics contributing to KBH's Value grade of A and MDC's Value grade of C.
Both KBH and MDC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KBH is the superior value option right now.
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KBH vs. MDC: Which Stock Is the Better Value Option?
Investors with an interest in Building Products - Home Builders stocks have likely encountered both KB Home (KBH - Free Report) and M.D.C. Holdings, Inc. . But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out.
There are plenty of strategies for discovering value stocks, but we have found that pairing a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system produces the best returns. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
KB Home and M.D.C. Holdings, Inc. are both sporting a Zacks Rank of # 1 (Strong Buy) right now. The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is just one factor that value investors are interested in.
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.
The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value.
KBH currently has a forward P/E ratio of 8.15, while MDC has a forward P/E of 8.17. We also note that KBH has a PEG ratio of 0.39. 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. MDC currently has a PEG ratio of 0.54.
Another notable valuation metric for KBH is its P/B ratio of 1.41. 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, MDC has a P/B of 1.75.
These are just a few of the metrics contributing to KBH's Value grade of A and MDC's Value grade of C.
Both KBH and MDC are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KBH is the superior value option right now.