Don't overlook NYSE:PHM—it's a hidden gem with strong fundamentals and an attractive price tag.

Our stock screener has spotted PULTEGROUP INC (NYSE:PHM) as an undervalued stock with solid fundamentals. NYSE:PHM shows decent health and profitability. At the same time it remains remains attractively priced. We'll dive into each aspect below.

A Closer Look at Valuation for NYSE:PHM

ChartMill employs its own Valuation Rating system for all stocks. This score, ranging from 0 to 10, is determined by evaluating different valuation factors, including price to earnings and free cash flow, both in absolute terms and relative to the market and industry. NYSE:PHM has earned a 7 for valuation:

• Based on the Price/Earnings ratio of 10.46, the valuation of PHM can be described as reasonable.
• PHM's Price/Earnings ratio is a bit cheaper when compared to the industry. PHM is cheaper than 75.38% of the companies in the same industry.
• The average S&P500 Price/Earnings ratio is at 30.04. PHM is valued rather cheaply when compared to this.
• Based on the Price/Forward Earnings ratio of 9.78, the valuation of PHM can be described as reasonable.
• 75.38% of the companies in the same industry are more expensive than PHM, based on the Price/Forward Earnings ratio.
• Compared to an average S&P500 Price/Forward Earnings ratio of 21.67, PHM is valued rather cheaply.
• 83.08% 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.

Profitability Examination for NYSE:PHM

ChartMill's Profitability Rating offers a unique perspective on stock analysis, providing scores from 0 to 10. These ratings consider a wide range of profitability metrics and margins, both in comparison to industry peers and on their own merits. For NYSE:PHM, the assigned 9 is a significant indicator of profitability:

• PHM has a better Return On Assets (17.03%) than 96.92% of its industry peers.
• The Return On Equity of PHM (25.10%) is better than 86.15% of its industry peers.
• Looking at the Return On Invested Capital, with a value of 19.91%, PHM belongs to the top of the industry, outperforming 96.92% of the companies in the same industry.
• PHM had an Average Return On Invested Capital over the past 3 years of 18.34%. This is significantly above the industry average of 10.79%.
• The 3 year average ROIC (18.34%) for PHM is below the current ROIC(19.91%), indicating increased profibility in the last year.
• PHM's Profit Margin of 16.72% is amongst the best of the industry. PHM outperforms 93.85% of its industry peers.
• In the last couple of years the Profit Margin of PHM has grown nicely.
• PHM's Operating Margin of 21.49% is amongst the best of the industry. PHM outperforms 95.38% of its industry peers.
• In the last couple of years the Operating Margin of PHM has grown nicely.
• In the last couple of years the Gross Margin of PHM has grown nicely.

Understanding NYSE:PHM's Health Score

ChartMill employs its own Health Rating for stock assessment. This rating, ranging from 0 to 10, is calculated by examining various liquidity and solvency ratios. In the case of NYSE:PHM, the assigned 8 reflects its health status:

• PHM has an Altman-Z score of 6.36. This indicates that PHM is financially healthy and has little risk of bankruptcy at the moment.
• With an excellent Altman-Z score value of 6.36, PHM belongs to the best of the industry, outperforming 86.15% of the companies in the same industry.
• PHM has a debt to FCF ratio of 1.67. This is a very positive value and a sign of high solvency as it would only need 1.67 years to pay back of all of its debts.
• PHM has a better Debt to FCF ratio (1.67) than 72.31% of its industry peers.
• A Debt/Equity ratio of 0.19 indicates that PHM is not too dependend on debt financing.
• PHM has a Debt to Equity ratio of 0.19. This is in the better half of the industry: PHM outperforms 67.69% of its industry peers.
• A Current Ratio of 4.16 indicates that PHM has no problem at all paying its short term obligations.
• PHM's Current ratio of 4.16 is fine compared to the rest of the industry. PHM outperforms 70.77% of its industry peers.
• The current and quick ratio evaluation for PHM is rather negative, while it does have excellent solvency and profitability. These ratios do not necessarly indicate liquidity issues and need to be evaluated against the specifics of the business.

A Closer Look at Growth for NYSE:PHM

To evaluate a stock's growth potential, ChartMill utilizes a Growth Rating on a scale of 0 to 10. This comprehensive assessment considers various growth aspects, including historical and estimated EPS and revenue growth. NYSE:PHM has achieved a 5 out of 10:

• PHM shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 10.71%, which is quite good.
• 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.
• Measured over the past years, PHM shows a quite strong growth in Revenue. The Revenue has been growing by 9.53% on average per year.
• PHM is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.43% yearly.

More Decent Value stocks can be found in our Decent Value screener.

Check the latest full fundamental report of PHM for a complete fundamental analysis.

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.