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PHM vs. DFH: Which Stock Should Value Investors Buy Now?
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Investors interested in stocks from the Building Products - Home Builders sector have probably already heard of PulteGroup (PHM - 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.
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 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.
Currently, both PulteGroup and Dream Finders Homes Inc. are holding a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
PHM currently has a forward P/E ratio of 6.58, while DFH has a forward P/E of 10.20. We also note that PHM has a PEG ratio of 0.62. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DFH currently has a PEG ratio of 3.47.
Another notable valuation metric for PHM is its P/B ratio of 1.73. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, DFH has a P/B of 2.85.
These metrics, and several others, help PHM earn a Value grade of A, while DFH has been given a Value grade of C.
Both PHM and DFH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PHM is the superior value option right now.
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PHM vs. DFH: Which Stock Should Value Investors Buy Now?
Investors interested in stocks from the Building Products - Home Builders sector have probably already heard of PulteGroup (PHM - 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.
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 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.
Currently, both PulteGroup and Dream Finders Homes Inc. are holding a Zacks Rank of # 1 (Strong Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. However, value investors will care about much more than just this.
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.
PHM currently has a forward P/E ratio of 6.58, while DFH has a forward P/E of 10.20. We also note that PHM has a PEG ratio of 0.62. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DFH currently has a PEG ratio of 3.47.
Another notable valuation metric for PHM is its P/B ratio of 1.73. The P/B ratio pits a stock's market value against its book value, which is defined as total assets minus total liabilities. For comparison, DFH has a P/B of 2.85.
These metrics, and several others, help PHM earn a Value grade of A, while DFH has been given a Value grade of C.
Both PHM and DFH are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that PHM is the superior value option right now.