In a market where value is scarce, NYSE:MTH offers a refreshing opportunity with its solid fundamentals.

Last update: Jan 8, 2025

Consider MERITAGE HOMES CORP (NYSE:MTH) as a top value stock, identified by our stock screening tool. NYSE:MTH shines in terms of profitability, solvency, and liquidity, all while remaining very reasonably priced. Let's dive deeper into the analysis.

A Closer Look at Valuation for NYSE:MTH

An integral part of ChartMill's stock analysis is the Valuation Rating, which spans from 0 to 10. This rating evaluates diverse valuation factors, including price to earnings and cash flows, while considering the stock's profitability and growth. NYSE:MTH has received a 8 out of 10:

With a Price/Earnings ratio of 3.37, the valuation of MTH can be described as very cheap.
Based on the Price/Earnings ratio, MTH is valued cheaper than 98.44% of the companies in the same industry.
When comparing the Price/Earnings ratio of MTH to the average of the S&P500 Index (27.25), we can say MTH is valued rather cheaply.
Based on the Price/Forward Earnings ratio of 3.45, the valuation of MTH can be described as very cheap.
Based on the Price/Forward Earnings ratio, MTH is valued cheaper than 98.44% of the companies in the same industry.
MTH is valuated cheaply when we compare the Price/Forward Earnings ratio to 23.54, which is the current average of the S&P500 Index.
Based on the Enterprise Value to EBITDA ratio, MTH is valued cheaply inside the industry as 98.44% of the companies are valued more expensively.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
MTH has an outstanding profitability rating, which may justify a higher PE ratio.

Exploring NYSE:MTH's Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, NYSE:MTH has achieved a 8:

MTH has a better Return On Assets (11.44%) than 84.38% of its industry peers.
MTH has a Return On Equity of 16.15%. This is in the better half of the industry: MTH outperforms 68.75% of its industry peers.
MTH's Return On Invested Capital of 12.73% is fine compared to the rest of the industry. MTH outperforms 73.44% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for MTH is above the industry average of 12.02%.
The last Return On Invested Capital (12.73%) for MTH is well below the 3 year average (16.78%), which needs to be investigated, but indicates that MTH had better years and this may not be a problem.
MTH's Profit Margin of 12.63% is amongst the best of the industry. MTH outperforms 87.50% of its industry peers.
In the last couple of years the Profit Margin of MTH has grown nicely.
MTH has a better Operating Margin (16.22%) than 85.94% of its industry peers.
In the last couple of years the Operating Margin of MTH has grown nicely.
In the last couple of years the Gross Margin of MTH has grown nicely.

How do we evaluate the Health for NYSE:MTH?

Every stock is evaluated by ChartMill, receiving a Health Rating on a scale of 0 to 10. This assessment considers different health aspects, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:MTH has achieved a 6 out of 10:

An Altman-Z score of 4.13 indicates that MTH is not in any danger for bankruptcy at the moment.
The Altman-Z score of MTH (4.13) is better than 64.06% of its industry peers.
A Debt/Equity ratio of 0.26 indicates that MTH is not too dependend on debt financing.
A Current Ratio of 8.81 indicates that MTH has no problem at all paying its short term obligations.
With an excellent Current ratio value of 8.81, MTH belongs to the best of the industry, outperforming 92.19% of the companies in the same industry.
MTH's Quick ratio of 1.63 is fine compared to the rest of the industry. MTH outperforms 76.56% of its industry peers.

Growth Examination for NYSE:MTH

A key component of ChartMill's stock assessment is the Growth Rating, which spans from 0 to 10. This rating evaluates diverse growth factors, such as EPS and revenue growth, considering both past performance and future projections. NYSE:MTH has received a 4 out of 10:

The Earnings Per Share has been growing by 28.78% on average over the past years. This is a very strong growth
Measured over the past years, MTH shows a quite strong growth in Revenue. The Revenue has been growing by 11.71% on average per year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of MTH

Disclaimer

This article should in no way be interpreted as advice. The article is based on the observed metrics at the time of writing, but you should always make your own analysis and trade or invest at your own responsibility.