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TOL vs. NVR: Which Stock Is the Better Value Option?
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Investors interested in stocks from the Building Products - Home Builders sector have probably already heard of Toll Brothers (TOL - Free Report) and NVR (NVR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Toll Brothers has a Zacks Rank of #2 (Buy), while NVR has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TOL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 10.08, while NVR has a forward P/E of 18.43. We also note that TOL has a PEG ratio of 1.10. 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. NVR currently has a PEG ratio of 1.95.
Another notable valuation metric for TOL is its P/B ratio of 1.99. 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 6.59.
These metrics, and several others, help TOL earn a Value grade of B, while NVR has been given a Value grade of C.
TOL stands above NVR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TOL is the superior value option right now.
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TOL vs. NVR: Which Stock Is the Better Value Option?
Investors interested in stocks from the Building Products - Home Builders sector have probably already heard of Toll Brothers (TOL - Free Report) and NVR (NVR - Free Report) . But which of these two stocks presents investors with the better value opportunity right now? 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.
Toll Brothers has a Zacks Rank of #2 (Buy), while NVR has a Zacks Rank of #3 (Hold) right now. This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that TOL is likely seeing its earnings outlook improve to a greater extent. But this is just one piece of the puzzle for value investors.
Value investors are also interested in a number of tried-and-true valuation metrics that help show when 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 10.08, while NVR has a forward P/E of 18.43. We also note that TOL has a PEG ratio of 1.10. 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. NVR currently has a PEG ratio of 1.95.
Another notable valuation metric for TOL is its P/B ratio of 1.99. 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 6.59.
These metrics, and several others, help TOL earn a Value grade of B, while NVR has been given a Value grade of C.
TOL stands above NVR thanks to its solid earnings outlook, and based on these valuation figures, we also feel that TOL is the superior value option right now.