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Should Value Investors Buy These Construction Stocks?
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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is PulteGroup (PHM - Free Report) . PHM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.82, which compares to its industry's average of 6.13. PHM's Forward P/E has been as high as 9.56 and as low as 5.48, with a median of 6.58, all within the past year.
PHM is also sporting a PEG ratio of 0.25. 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. PHM's PEG compares to its industry's average PEG of 0.42. Within the past year, PHM's PEG has been as high as 1.01 and as low as 0.24, with a median of 0.75.
Finally, we should also recognize that PHM has a P/CF ratio of 7.44. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PHM's P/CF compares to its industry's average P/CF of 7.87. Over the past 52 weeks, PHM's P/CF has been as high as 10.53 and as low as 6.64, with a median of 8.18.
If you're looking for another solid Building Products - Home Builders value stock, take a look at Toll Brothers (TOL - Free Report) . TOL is a # 1 (Strong Buy) stock with a Value score of A.
Toll Brothers is currently trading with a Forward P/E ratio of 5.61 while its PEG ratio sits at 0.21. Both of the company's metrics compare favorably to its industry's average P/E of 6.13 and average PEG ratio of 0.42.
TOL's price-to-earnings ratio has been as high as 11.65 and as low as 5.61, with a median of 7.87, while its PEG ratio has been as high as 0.75 and as low as 0.18, with a median of 0.58, all within the past year.
Additionally, Toll Brothers has a P/B ratio of 1.31 while its industry's price-to-book ratio sits at 1.41. For TOL, this valuation metric has been as high as 1.70, as low as 1.25, with a median of 1.46 over the past year.
These are just a handful of the figures considered in PulteGroup and Toll Brothers's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PHM and TOL is an impressive value stock right now.
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Should Value Investors Buy These Construction Stocks?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One stock to keep an eye on is PulteGroup (PHM - Free Report) . PHM is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with a P/E ratio of 5.82, which compares to its industry's average of 6.13. PHM's Forward P/E has been as high as 9.56 and as low as 5.48, with a median of 6.58, all within the past year.
PHM is also sporting a PEG ratio of 0.25. 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. PHM's PEG compares to its industry's average PEG of 0.42. Within the past year, PHM's PEG has been as high as 1.01 and as low as 0.24, with a median of 0.75.
Finally, we should also recognize that PHM has a P/CF ratio of 7.44. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. PHM's P/CF compares to its industry's average P/CF of 7.87. Over the past 52 weeks, PHM's P/CF has been as high as 10.53 and as low as 6.64, with a median of 8.18.
If you're looking for another solid Building Products - Home Builders value stock, take a look at Toll Brothers (TOL - Free Report) . TOL is a # 1 (Strong Buy) stock with a Value score of A.
Toll Brothers is currently trading with a Forward P/E ratio of 5.61 while its PEG ratio sits at 0.21. Both of the company's metrics compare favorably to its industry's average P/E of 6.13 and average PEG ratio of 0.42.
TOL's price-to-earnings ratio has been as high as 11.65 and as low as 5.61, with a median of 7.87, while its PEG ratio has been as high as 0.75 and as low as 0.18, with a median of 0.58, all within the past year.
Additionally, Toll Brothers has a P/B ratio of 1.31 while its industry's price-to-book ratio sits at 1.41. For TOL, this valuation metric has been as high as 1.70, as low as 1.25, with a median of 1.46 over the past year.
These are just a handful of the figures considered in PulteGroup and Toll Brothers's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that PHM and TOL is an impressive value stock right now.