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Are These Construction Stocks a Great Value Stocks 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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
KB Home (KBH - Free Report) is a stock many investors are watching right now. KBH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 3.76. This compares to its industry's average Forward P/E of 5.39. Over the past 52 weeks, KBH's Forward P/E has been as high as 9.04 and as low as 3.73, with a median of 6.15.
Investors will also notice that KBH has a PEG ratio of 0.22. 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. KBH's industry currently sports an average PEG of 0.46. Over the last 12 months, KBH's PEG has been as high as 0.44 and as low as 0.14, with a median of 0.36.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KBH has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.65.
Finally, investors will want to recognize that KBH has a P/CF ratio of 5.93. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.45. KBH's P/CF has been as high as 13.29 and as low as 5.88, with a median of 8.47, all within the past year.
If you're looking for another solid Building Products - Home Builders value stock, take a look at PulteGroup (PHM - Free Report) . PHM is a # 2 (Buy) stock with a Value score of A.
Shares of PulteGroup are currently trading at a forward earnings multiple of 4.68 and a PEG ratio of 0.51 compared to its industry's P/E and PEG ratios of 5.39 and 0.46, respectively.
Over the last 12 months, PHM's P/E has been as high as 9.56, as low as 4.68, with a median of 6.46, and its PEG ratio has been as high as 1.01, as low as 0.24, with a median of 0.74.
Additionally, PulteGroup has a P/B ratio of 1.59 while its industry's price-to-book ratio sits at 1.02. For PHM, this valuation metric has been as high as 2.45, as low as 1.59, with a median of 1.95 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that KB Home and PulteGroup are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KBH and PHM feels like a great value stock at the moment.
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Are These Construction Stocks a Great Value Stocks Right Now?
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 tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
KB Home (KBH - Free Report) is a stock many investors are watching right now. KBH is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 3.76. This compares to its industry's average Forward P/E of 5.39. Over the past 52 weeks, KBH's Forward P/E has been as high as 9.04 and as low as 3.73, with a median of 6.15.
Investors will also notice that KBH has a PEG ratio of 0.22. 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. KBH's industry currently sports an average PEG of 0.46. Over the last 12 months, KBH's PEG has been as high as 0.44 and as low as 0.14, with a median of 0.36.
Value investors also frequently use the P/S ratio. This metric is found by dividing a stock's price with the company's revenue. Some people prefer this metric because sales are harder to manipulate on an income statement. This means it could be a truer performance indicator. KBH has a P/S ratio of 0.61. This compares to its industry's average P/S of 0.65.
Finally, investors will want to recognize that KBH has a P/CF ratio of 5.93. 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. This company's current P/CF looks solid when compared to its industry's average P/CF of 7.45. KBH's P/CF has been as high as 13.29 and as low as 5.88, with a median of 8.47, all within the past year.
If you're looking for another solid Building Products - Home Builders value stock, take a look at PulteGroup (PHM - Free Report) . PHM is a # 2 (Buy) stock with a Value score of A.
Shares of PulteGroup are currently trading at a forward earnings multiple of 4.68 and a PEG ratio of 0.51 compared to its industry's P/E and PEG ratios of 5.39 and 0.46, respectively.
Over the last 12 months, PHM's P/E has been as high as 9.56, as low as 4.68, with a median of 6.46, and its PEG ratio has been as high as 1.01, as low as 0.24, with a median of 0.74.
Additionally, PulteGroup has a P/B ratio of 1.59 while its industry's price-to-book ratio sits at 1.02. For PHM, this valuation metric has been as high as 2.45, as low as 1.59, with a median of 1.95 over the past year.
These figures are just a handful of the metrics value investors tend to look at, but they help show that KB Home and PulteGroup are likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, KBH and PHM feels like a great value stock at the moment.