Here's Why PulteGroup (PHM) is a Strong Value Stock

Zacks
01-08

Taking full advantage of the stock market and investing with confidence are common goals for new and old investors alike.

Many investors also have a go-to methodology that helps guide their buy and sell decisions. One way to find winning stocks based on your preferred way of investing is to use the Zacks Style Scores, which are indicators that rate stocks based on three widely-followed investing types: value, growth, and momentum.

Why Investors Should Pay Attention to This Value Stock

Finding good stocks at good prices, and discovering which companies are trading under their true value, are what value investors like to focus on. So, the Value Style Score takes into account ratios like P/E, PEG, Price/Sales, and Price/Cash Flow to highlight the most attractive and discounted stocks.

PulteGroup (PHM)

Based in Atlanta, GA, PulteGroup Inc. engages in homebuilding and financial services businesses, primarily in the United States. The company conducts operations through two primary business segments – Homebuilding (which contributed 98% as of 2023 to total revenues) and Financial Services (2%).

PHM sits at a Zacks Rank #3 (Hold), holds a Value Style Score of A, and has a VGM Score of B. Compared to the Building Products - Home Builders industry's P/E of 7.7X, shares of PulteGroup are trading at a forward P/E of 8.1X. PHM also has a PEG Ratio of 0.4, a Price/Cash Flow ratio of 8.5X, and a Price/Sales ratio of 1.3X.

Many value investors pay close attention to a company's earnings as well. For PHM, one analyst revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.01 to $13.43 per share for 2024. Per share PHM boasts an average earnings surprise of 10.9%.

PHM should be on investors' short lists because of its impressive earnings and valuation fundamentals, a good Zacks Rank, and strong Value and VGM Style Scores.

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