PulteGroup (PHM) & Its Competitors Critical Review

PulteGroup (NYSE: PHM) is one of 24 public companies in the “Homebuilding” industry, but how does it weigh in compared to its peers? We will compare PulteGroup to related businesses based on the strength of its risk, institutional ownership, valuation, analyst recommendations, earnings, profitability and dividends.

Analyst Ratings

This is a breakdown of current ratings and target prices for PulteGroup and its peers, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
PulteGroup 2 7 5 0 2.21
PulteGroup Competitors 278 1650 1908 38 2.44

PulteGroup currently has a consensus target price of $27.30, suggesting a potential downside of 13.53%. As a group, “Homebuilding” companies have a potential upside of 1.46%. Given PulteGroup’s peers stronger consensus rating and higher possible upside, analysts plainly believe PulteGroup has less favorable growth aspects than its peers.

Earnings & Valuation

This table compares PulteGroup and its peers revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
PulteGroup $7.67 billion $602.70 million 15.71
PulteGroup Competitors $3.85 billion $247.94 million 486.63

PulteGroup has higher revenue and earnings than its peers. PulteGroup is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Volatility and Risk

PulteGroup has a beta of 1.18, suggesting that its share price is 18% more volatile than the S&P 500. Comparatively, PulteGroup’s peers have a beta of 1.52, suggesting that their average share price is 52% more volatile than the S&P 500.

Dividends

PulteGroup pays an annual dividend of $0.36 per share and has a dividend yield of 1.1%. PulteGroup pays out 17.9% of its earnings in the form of a dividend. As a group, “Homebuilding” companies pay a dividend yield of 0.8% and pay out 13.4% of their earnings in the form of a dividend. PulteGroup has increased its dividend for 3 consecutive years.

Institutional and Insider Ownership

87.5% of PulteGroup shares are owned by institutional investors. Comparatively, 80.6% of shares of all “Homebuilding” companies are owned by institutional investors. 0.7% of PulteGroup shares are owned by company insiders. Comparatively, 14.3% of shares of all “Homebuilding” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares PulteGroup and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
PulteGroup 7.77% 14.38% 6.53%
PulteGroup Competitors 9.82% 14.89% 8.04%

Summary

PulteGroup peers beat PulteGroup on 11 of the 15 factors compared.

PulteGroup Company Profile

PulteGroup, Inc. is a homebuilder in the United States. The Company’s segments include Homebuilding and Financial Services. Its Homebuilding operations are engaged in the acquisition and development of land primarily for residential purposes within the United States and the construction of housing on such land. Its Financial Services operations consist principally of mortgage banking and title operations. The Company conducts its financial services business, through Pulte Mortgage LLC (Pulte Mortgage) and other subsidiaries. Pulte Mortgage arranges financing through the origination of mortgage loans. The Company’s subsidiaries are engaged in the homebuilding business. It offers a product line to meet the needs of homebuyers in its focused markets. Through its brands, which include Centex, Pulte Homes, Del Webb, DiVosta Homes, and John Wieland Homes and Neighborhoods, the Company offers a range of home designs, including single-family detached, townhouses, condominiums and duplexes.

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