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Is PulteGroup (PHM) a Great Value Stock Right Now?

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Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

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 value investors might notice is PulteGroup (PHM - Free Report) . PHM is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock has a Forward P/E ratio of 6.57. This compares to its industry's average Forward P/E of 7.32. Over the last 12 months, PHM's Forward P/E has been as high as 17.07 and as low as 6.57, with a median of 9.19.

Investors will also notice that PHM has a PEG ratio of 0.34. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. PHM's industry has an average PEG of 0.48 right now. Within the past year, PHM's PEG has been as high as 1 and as low as 0.34, with a median of 0.48.

Finally, we should also recognize that PHM has a P/CF ratio of 8.96. 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 11.57. Over the past 52 weeks, PHM's P/CF has been as high as 20.71 and as low as 8.96, with a median of 14.48.

Value investors will likely look at more than just these metrics, but the above data helps show that PulteGroup is likely undervalued currently. And when considering the strength of its earnings outlook, PHM sticks out at as one of the market's strongest value stocks.




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