January 30, 2025
Top 10 Stock PulteGroup Strong Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: PulteGroup – Top 10 Stock in S&P 500 Consumer Discretionary Index
PulteGroup is listed as a top 10 stock on January 30, 2025 in the market index S&P US Luxury because of its high performance in at least one of the Obermatt investment strategies. Two consolidated Obermatt Ranks are above-average. The company is safely financed and the professional investor sentiment is positive. Both are encouraging signals for a stock purchase decision, albeit at an above-average share price. Based on the Obermatt 360° View of 99 (top 99% performer), Obermatt assesses an overall strong buy recommendation for PulteGroup on January 30, 2025.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Homebuilding |
| Index | Dividends USA, S&P US Luxury, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View PulteGroup Strong Buy
| 360 METRICS | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 94 |
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| SENTIMENT | ||||||||
| SENTIMENT | 83 |
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| 360° VIEW | ||||||||
| 360° VIEW | 99 |
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ANALYSIS: With an Obermatt 360° View of 99 (better than 99% compared with alternatives) for 2022, overall professional sentiment and financial characteristics for the stock PulteGroup are very positive. The 360° View is based on consolidating four consolidated indicators, with half below and half above average for PulteGroup. The consolidated Sentiment Rank has a good rank of 83, which means that professional investors are more optimistic about the stock than for 83% of alternative investment opportunities. It also rates well regarding its financing structure, with the consolidated Safety Rank at 94 or better than 94% of its peers when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. But the stock is expensive and expects low growth. The consolidated Value Rank is only 49, meaning that the share price of PulteGroup is on the high side, compared with indicators such as revenues, profits, and invested capital. The company exhibits below-average growth momentum when looking at financial metrics such as revenue, profit, invested capital growth,and stock returns, with its Growth Rank at 31. ...read more
RECOMMENDATION: With a consolidated 360° View of 99, PulteGroup is better positioned than 99% of all alternative stock investment opportunities based on the Obermatt Method. As only half of the consolidated Obermatt Ranks exhibit excellent performance, namely the positive professional market sentiment (Sentiment Rank of 83) and safe financing practices (Safety Rank of 94), the case for investing in this stock needs further thought. The Value and the Safety Ranks are below average. The Safety Rank is the least critical of the four consolidated ranks, because it only reflects financing practices. So the question is: How to assess below-average value against above-average sentiment? This may be a case where growth is in the future, not yet reflected in current performance. Companies that might fall into this category are those with intellectual property, such as technology and pharmaceutical companies. In early phases, they are expensive relative to their size and have a lot of capital on their books, as is the case here. Investors expect a better future and are willing to pay a higher price than is warranted by the current company size. These higher prices drive stock price value down in the short term. In this case, future growth may be the strongest driver of the investment case, reflected by institutional investors' opinions. With a weak Value Rank, the question is how much to sacrifice value at the cost of positive sentiment. Sometimes market sentiment is just hype, but sometimes it is right. You pay more than market-average for this stock, but it may be worth it, if the future of PulteGroup̣ is bright. Prudent investors may only want to invest a smaller portion of their wealth in such situations. Young investors can carry more risk but should still thrive for sufficient diversification. ...read more
Sentiment Strategy: Professional Market Sentiment for PulteGroup very positive
ANALYSIS: With an Obermatt Sentiment Rank of 83 (better than 83% compared with alternatives) for 2022, overall professional sentiment and engagement for the stock PulteGroup is very positive. The Sentiment Rank is based on consolidating four sentiment indicators where all but one are above average for PulteGroup. Analyst Opinions are at a rank of 65 (better than 65% of alternative investments), which means that currently, stock research analysts tend to recommend a stock investment in the company. The Professional Investors rank is also good at 77, which means that currently, professional investors hold more stock in this company than in 77% of alternative investment opportunities. Pros tend to favor investing in this company. In addition, Market Pulse has a rank of 84 which means that the current professional news and professional social networks are on the positive side when discussing this company (more positive news than for 84% of competitors). But Analyst Opinions Change has a below-average rank of 45, which means that stock research experts are currently changing their opinions for the worse when it comes to recommending this stock. In other words, they are getting more critical of investments in PulteGroup. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 83 (more positive than 83% compared with investment alternatives), PulteGroup has a reputation among professional investors that is significantly higher than that of its competitors. This is an early sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it might just materialize in the future. ...read more
Value Strategy: PulteGroup Stock Price Value below-average critical
ANALYSIS: With an Obermatt Value Rank of 49 (worse than 51% compared with alternatives), PulteGroup shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with half of the indicators below and half above average for PulteGroup. Price-to-Profit (also referred to as price-earnings, P/E) is 71 which means that the stock price compared with what market professionals expect for future profits is lower than for 71% of comparable companies, indicating a good value concerning PulteGroup's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 35, which means that the stock price is lower as regards to invested capital than for 35% of comparable investments. On the other hand, Price-to-Sales is less favorable than 72% of alternatives (only 28% of peers have an even less favorable ratio). The same is valid for dividend yield, which is lower than 33% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 49, is a hold recommendation based on PulteGroup's stock price compared with the company's operational size and dividend yields. This is a puzzling picture, because it means that profits are high while dividends are low. Since the stock price is low compared with invested capital but high in respect to expected revenues, it means that the company has more invested capital than peers for generating the same amount of revenue. Since profits are higher, it could be a "cash cow" situation (using the classic Boston Consulting BCG matrix naming convention) where the company is on a downward trend, still living from the profits of past products. As the company pays low dividends, it may harbor the opinion that a turnaround is possible, and it rather invests the cash than pay it out to shareholders, thus sealing the company's fate early. Any investment optimism should only be a buy trigger once thorough research is completed. ...read more
Growth Strategy: PulteGroup Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), PulteGroup shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for PulteGroup. Profit Growth has a rank of 53, which means that currently professionals expect the company to grow its profits more than 53% of its competitors. This is a good sign for shareholders, which is confirmed by an above-average Stock Returns rank of 57 (above 57% of alternative investments). But Sales Growth has a below the median rank of 34, which means that, currently, professionals expect the company to grow less than 66% of its competitors, and Capital Growth also has a lower rank of 21. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. Because revenues and invested capital are the more solid growth indicators, the positive development on the profit side is less relevant. It may have been caused by cost-cutting, which may be a negative growth indicator. Finally, the above-average stock returns recently are a thing of the past and not a good indicator of future returns. Investors should be confident that the cost-cutting initiative leading to higher profits is to benefit the company's future. If not, there is little growth momentum, and investment is only advisable if the Value Ranks suggest a good investment timing for PulteGroup. ...read more
Safety Strategy: PulteGroup Debt Financing Safety very solid
| SAFETY METRICS | January 30, 2025 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 72 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 100 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 94 |
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ANALYSIS: With an Obermatt Safety Rank of 94 (better than 94% compared with alternatives) for 2022, the company PulteGroup has safe financing practices, which means that their overall debt burden is low. This doesn't mean that the business of PulteGroup is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, where all three are above average for PulteGroup. Leverage is at 58, meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors. Refinancing is at a rank of 72, meaning that the portion of the debt about to be refinanced is below average. It has less debt in the refinancing stage than 72% of its competitors. Finally, Liquidity is also good at a rank of 100, which means that the company generates more profit to service its debt than 100% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 94 (better than 94% compared with alternatives), PulteGroup has a financing structure that is significantly safer than that of its competitors. These three positive financing indicators signal that the company is less likely to default on its debt obligations. However, it also means that its shareholder returns will be more modest if things go well. A low safety means fewer troubles in downtimes and less upside in good times. ...read more
Combined financial peformance: PulteGroup Top Financial Performance
| COMBINED PERFORMANCE | January 30, 2025 | |||||||
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| VALUE | ||||||||
| VALUE | 49 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 100 |
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| COMBINED | ||||||||
| COMBINED | 94 |
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ANALYSIS: With an Obermatt Combined Rank of 94 (better than 94% compared with investment alternatives), PulteGroup (Homebuilding, USA) shares have much better financial characteristics than comparable stocks. Shares of PulteGroup are low in value (priced high) with a consolidated Value Rank of 49 (worse than 51% of alternatives) and show below-average growth (Growth Rank of 31) but are safely financed (Safety Rank of 94), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 94, is a strong buy recommendation based on PulteGroup's financial characteristics. As the company PulteGroup's critical financial metrics exhibit below-average performance, such as low value (Obermatt Value Rank of 49) and low growth (Obermatt Growth Rank of 31), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. In this case, good financing practices (Obermatt Safety Rank of 94) are a positive sign, because it may allow the company to weather challenging times until the hoped-for cash flows materialize. This may be true for high-tech or biotechnology companies with enough cash to sustain prolonged business development. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and unattractive today. In such cases, the Obermatt Method has limited value, as it is based on facts we can observe today. If the facts lie all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that account for a small fraction of a safe portfolio. ...read more
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