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TOL or NVR: Which Is the Better Value Stock Right Now?
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Investors with an interest in Building Products - Home Builders stocks have likely encountered both Toll Brothers (TOL - Free Report) and NVR (NVR - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Toll Brothers and NVR are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that TOL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
TOL currently has a forward P/E ratio of 5.94, while NVR has a forward P/E of 13.50. We also note that TOL has a PEG ratio of 0.60. 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. NVR currently has a PEG ratio of 3.18.
Another notable valuation metric for TOL is its P/B ratio of 1.13. 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, NVR has a P/B of 4.65.
These metrics, and several others, help TOL earn a Value grade of B, while NVR has been given a Value grade of C.
TOL sticks out from NVR in both our Zacks Rank and Style Scores models, so value investors will likely feel that TOL is the better option right now.
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TOL or NVR: Which Is the Better Value Stock Right Now?
Investors with an interest in Building Products - Home Builders stocks have likely encountered both Toll Brothers (TOL - Free Report) and NVR (NVR - Free Report) . But which of these two stocks offers value investors a better bang for their buck right now? We'll need to take a closer look.
The best way to find great value stocks is to pair a strong Zacks Rank with an impressive grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.
Toll Brothers and NVR are sporting Zacks Ranks of #1 (Strong Buy) and #2 (Buy), respectively, right now. This means that TOL's earnings estimate revision activity has been more impressive, so investors should feel comfortable with its improving analyst outlook. But this is just one factor that value investors are interested in.
Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its 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.
TOL currently has a forward P/E ratio of 5.94, while NVR has a forward P/E of 13.50. We also note that TOL has a PEG ratio of 0.60. 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. NVR currently has a PEG ratio of 3.18.
Another notable valuation metric for TOL is its P/B ratio of 1.13. 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, NVR has a P/B of 4.65.
These metrics, and several others, help TOL earn a Value grade of B, while NVR has been given a Value grade of C.
TOL sticks out from NVR in both our Zacks Rank and Style Scores models, so value investors will likely feel that TOL is the better option right now.