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Is Meritage Homes (MTH) Stock Undervalued Right Now?
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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Meritage Homes (MTH - Free Report) . MTH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.48 right now. For comparison, its industry sports an average P/E of 9.37. Over the last 12 months, MTH's Forward P/E has been as high as 9.60 and as low as 2.46, with a median of 5.19.
Investors should also recognize that MTH has a P/B ratio of 1.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.23. Over the past year, MTH's P/B has been as high as 1.15 and as low as 0.66, with a median of 0.92.
Finally, we should also recognize that MTH has a P/CF ratio of 4.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.66. Within the past 12 months, MTH's P/CF has been as high as 5.11 and as low as 2.47, with a median of 3.44.
Investors could also keep in mind Tri Pointe Homes (TPH - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Tri Pointe Homes is currently trading with a Forward P/E ratio of 8.70 while its PEG ratio sits at 0.67. Both of the company's metrics compare favorably to its industry's average P/E of 9.37 and average PEG ratio of 0.75.
Over the last 12 months, TPH's P/E has been as high as 9.15, as low as 2.67, with a median of 5.94, and its PEG ratio has been as high as 0.70, as low as 0.48, with a median of 0.62.
Additionally, Tri Pointe Homes has a P/B ratio of 1.02 while its industry's price-to-book ratio sits at 1.23. For TPH, this valuation metric has been as high as 1.07, as low as 0.57, with a median of 0.75 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Meritage Homes and Tri Pointe Homes are likely undervalued currently. And when considering the strength of its earnings outlook, MTH and TPH sticks out as one of the market's strongest value stocks.
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Is Meritage Homes (MTH) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Of these, perhaps no stock market trend is more popular than value investing, which is a strategy that has proven to be successful in all sorts of market environments. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Meritage Homes (MTH - Free Report) . MTH is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock is trading with P/E ratio of 7.48 right now. For comparison, its industry sports an average P/E of 9.37. Over the last 12 months, MTH's Forward P/E has been as high as 9.60 and as low as 2.46, with a median of 5.19.
Investors should also recognize that MTH has a P/B ratio of 1.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 1.23. Over the past year, MTH's P/B has been as high as 1.15 and as low as 0.66, with a median of 0.92.
Finally, we should also recognize that MTH has a P/CF ratio of 4.75. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 5.66. Within the past 12 months, MTH's P/CF has been as high as 5.11 and as low as 2.47, with a median of 3.44.
Investors could also keep in mind Tri Pointe Homes (TPH - Free Report) , an Building Products - Home Builders stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Tri Pointe Homes is currently trading with a Forward P/E ratio of 8.70 while its PEG ratio sits at 0.67. Both of the company's metrics compare favorably to its industry's average P/E of 9.37 and average PEG ratio of 0.75.
Over the last 12 months, TPH's P/E has been as high as 9.15, as low as 2.67, with a median of 5.94, and its PEG ratio has been as high as 0.70, as low as 0.48, with a median of 0.62.
Additionally, Tri Pointe Homes has a P/B ratio of 1.02 while its industry's price-to-book ratio sits at 1.23. For TPH, this valuation metric has been as high as 1.07, as low as 0.57, with a median of 0.75 over the past year.
Value investors will likely look at more than just these metrics, but the above data helps show that Meritage Homes and Tri Pointe Homes are likely undervalued currently. And when considering the strength of its earnings outlook, MTH and TPH sticks out as one of the market's strongest value stocks.