Stock of the Day

July 7, 2021

PulteGroup (PHM)

$103.04
-$2.80 (-2.6%)
Market Cap: $21.43B

About PulteGroup

PulteGroup, Inc., through its subsidiaries, primarily engages in the homebuilding business in the United States. It acquires and develops land primarily for residential purposes; and constructs housing on such land. The company also offers various home designs, including single-family detached, townhomes, condominiums, and duplexes under the Centex, Pulte Homes, Del Webb, DiVosta Homes, John Wieland Homes and Neighborhoods, and American West brand names. In addition, the company arranges financing through the origination of mortgage loans primarily for homebuyers; sells the servicing rights for the originated loans; and provides title insurance policies, and examination and closing services to homebuyers. PulteGroup, Inc. was founded in 1950 and is headquartered in Atlanta, Georgia.

PulteGroup Bull Case

Here are some ways that investors could benefit from investing in PulteGroup, Inc.:

  • PulteGroup, Inc. recently reported earnings per share (EPS) of $3.50, exceeding the consensus estimate of $3.28, indicating strong financial performance and effective management.
  • The company has a robust return on equity of 24.43%, suggesting that it is efficiently generating profits from its equity investments, which is attractive to investors.
  • PulteGroup, Inc. has initiated a stock buyback plan allowing for the repurchase of up to $1.50 billion in shares, which can signal to investors that the company believes its stock is undervalued and can enhance shareholder value.
  • The current stock price is around $140.86, with a consensus rating of "Moderate Buy" from analysts, indicating positive market sentiment and potential for price appreciation.
  • The company maintains a low dividend payout ratio of 5.98%, allowing for reinvestment in growth opportunities while still providing a dividend yield of 0.84% to shareholders.

PulteGroup Bear Case

Investors should be bearish about investing in PulteGroup, Inc. for these reasons:

  • Several analysts have recently cut their price targets for PulteGroup, Inc., indicating a potential decrease in expected future performance and market confidence.
  • One analyst has rated the stock with a sell rating, which may suggest concerns about the company's future growth prospects compared to its peers.
  • The construction industry can be highly cyclical and sensitive to economic downturns, which may pose risks to PulteGroup, Inc.'s profitability and stock performance.
  • With a net margin of 17.18%, while still healthy, there may be concerns about the company's ability to maintain or improve profitability in a competitive market.
  • Market volatility and changes in interest rates can impact the housing market, which is critical for PulteGroup, Inc.'s business, potentially affecting its stock price negatively.

Recent News