NYSE:PHM: good value for what you're paying.

Last update: Jun 18, 2024

PULTEGROUP INC (NYSE:PHM) was identified as a decent value stock by our stock screener. NYSE:PHM scores well on profitability, solvency and liquidity. At the same time it seems to be priced very reasonably. We'll explore this a bit deeper below.

Evaluating Valuation: NYSE:PHM

ChartMill provides a Valuation Rating to every stock, ranging from 0 to 10. This rating assesses various valuation aspects, comparing price to earnings and cash flows, while considering factors like profitability and growth. NYSE:PHM boasts a 7 out of 10:

The Price/Earnings ratio is 9.42, which indicates a very decent valuation of PHM.
Compared to the rest of the industry, the Price/Earnings ratio of PHM indicates a somewhat cheap valuation: PHM is cheaper than 72.73% of the companies listed in the same industry.
When comparing the Price/Earnings ratio of PHM to the average of the S&P500 Index (28.66), we can say PHM is valued rather cheaply.
PHM is valuated reasonably with a Price/Forward Earnings ratio of 8.38.
Compared to the rest of the industry, the Price/Forward Earnings ratio of PHM indicates a somewhat cheap valuation: PHM is cheaper than 78.79% of the companies listed in the same industry.
PHM's Price/Forward Earnings ratio indicates a rather cheap valuation when compared to the S&P500 average which is at 20.15.
81.82% of the companies in the same industry are more expensive than PHM, based on the Enterprise Value to EBITDA ratio.
The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
The excellent profitability rating of PHM may justify a higher PE ratio.

Assessing Profitability for NYSE:PHM

ChartMill employs its own Profitability Rating system for stock evaluation. This score, ranging from 0 to 10, is derived from an analysis of diverse profitability metrics and margins. In the case of NYSE:PHM, the assigned 9 is noteworthy for profitability:

The Return On Assets of PHM (16.52%) is better than 95.45% of its industry peers.
Looking at the Return On Equity, with a value of 25.33%, PHM belongs to the top of the industry, outperforming 89.39% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 19.66%, PHM belongs to the top of the industry, outperforming 98.48% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PHM is significantly above the industry average of 10.10%.
The 3 year average ROIC (18.34%) for PHM is below the current ROIC(19.66%), indicating increased profibility in the last year.
With an excellent Profit Margin value of 16.59%, PHM belongs to the best of the industry, outperforming 90.91% of the companies in the same industry.
In the last couple of years the Profit Margin of PHM has grown nicely.
With an excellent Operating Margin value of 21.45%, PHM belongs to the best of the industry, outperforming 96.97% of the companies in the same industry.
In the last couple of years the Operating Margin of PHM has grown nicely.
PHM's Gross Margin has improved in the last couple of years.

A Closer Look at Health for NYSE:PHM

A critical element of ChartMill's stock evaluation is the Health Rating, which spans from 0 to 10. This rating considers multiple health factors, including liquidity and solvency, both in absolute terms and relative to industry peers. NYSE:PHM has received a 8 out of 10:

PHM has an Altman-Z score of 5.60. This indicates that PHM is financially healthy and has little risk of bankruptcy at the moment.
PHM's Altman-Z score of 5.60 is amongst the best of the industry. PHM outperforms 86.36% of its industry peers.
PHM has a debt to FCF ratio of 1.53. This is a very positive value and a sign of high solvency as it would only need 1.53 years to pay back of all of its debts.
The Debt to FCF ratio of PHM (1.53) is better than 75.76% of its industry peers.
A Debt/Equity ratio of 0.23 indicates that PHM is not too dependend on debt financing.
The Debt to Equity ratio of PHM (0.23) is better than 65.15% of its industry peers.
A Current Ratio of 4.02 indicates that PHM has no problem at all paying its short term obligations.
Looking at the Current ratio, with a value of 4.02, PHM is in the better half of the industry, outperforming 71.21% of the companies in the same industry.
PHM does not score too well on the current and quick ratio evaluation. However, as it has excellent solvency and profitability, these ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

How We Gauge Growth for NYSE:PHM

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:PHM has received a 4 out of 10:

Measured over the past years, PHM shows a very strong growth in Earnings Per Share. The EPS has been growing by 25.08% on average per year.
The Revenue has been growing by 9.53% on average over the past years. This is quite good.
The Earnings Per Share is expected to grow by 8.00% on average over the next years. This is quite good.

Our Decent Value screener lists more Decent Value stocks and is updated daily.

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

Keep in mind

Important Note: The content of this article is not intended as trading advice. It is essential to perform your own analysis and exercise caution when making trading decisions. The article presents observations created by automated analysis but does not guarantee any trading or investment outcomes. Always trade responsibly and make independent judgments.