We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
KBH vs. DFH: Which Stock Should Value Investors Buy Now?
Read MoreHide Full Article
Investors with an interest in Building Products - Home Builders stocks have likely encountered both KB Home (KBH - Free Report) and Dream Finders Homes Inc. (DFH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
KB Home and Dream Finders Homes Inc. are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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 7.77, while DFH has a forward P/E of 17.09. We also note that KBH has a PEG ratio of 0.40. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DFH currently has a PEG ratio of 0.43.
Another notable valuation metric for KBH is its P/B ratio of 1.47. 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, DFH has a P/B of 8.24.
These are just a few of the metrics contributing to KBH's Value grade of B and DFH's Value grade of C.
Both KBH and DFH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KBH is the superior value option right now.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
KBH vs. DFH: Which Stock Should Value Investors Buy Now?
Investors with an interest in Building Products - Home Builders stocks have likely encountered both KB Home (KBH - Free Report) and Dream Finders Homes Inc. (DFH - Free Report) . But which of these two companies is the best option for those looking for undervalued stocks? Let's take a closer look.
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 is a proven strategy that targets companies with positive earnings estimate revision trends, while our Style Scores work to grade companies based on specific traits.
KB Home and Dream Finders Homes Inc. are both sporting a Zacks Rank of # 2 (Buy) right now. This means that both companies have witnessed positive earnings estimate revisions, so investors should feel comfortable knowing that both of these stocks have an improving earnings outlook. 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 7.77, while DFH has a forward P/E of 17.09. We also note that KBH has a PEG ratio of 0.40. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. DFH currently has a PEG ratio of 0.43.
Another notable valuation metric for KBH is its P/B ratio of 1.47. 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, DFH has a P/B of 8.24.
These are just a few of the metrics contributing to KBH's Value grade of B and DFH's Value grade of C.
Both KBH and DFH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that KBH is the superior value option right now.