For those looking to find strong Construction stocks, it is prudent to search for companies in the group that are outperforming their peers. PulteGroup (PHM) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company's year-to-date performance in comparison to the rest of the Construction sector should help us answer this question.PulteGroup is one of 91 individual stocks in the Construction sector. ...

PulteGroup (PHM) ended the recent trading session at $132.70, demonstrating a +0.84% swing from the preceding day's closing price. This move outpaced the S&P 500's daily gain of 0.45%. Elsewhere, the Dow lost 0.23%, while the tech-heavy Nasdaq added 0.84%.Shares of the homebuilder witnessed a gain of 7.9% over the previous month, beating the performance of the Construction sector with its gain of 1.61% and the S&P 500's gain of 2.54%.The investment community will be paying close attention to the earnings pe ...

PulteGroup, Inc. (PHM) is gaining significant attention as markets anticipate a potential rate cut by the Federal Reserve in September. So far this year, the company’s shares have rallied 26.6%, demonstrating impressive resilience amid volatility and mixed industry data. This performance surpasses the Zacks Building Products - Home Builders industry’s 20.8% rise as well as the broader Construction sector's 13% increase and the Zacks S&P 500 Composite's 15.4% growth.This Atlanta, GA-based homebuilder has str ...

Core Viewpoint - PulteGroup has demonstrated strong stock performance, achieving a 52-week high and outperforming both the construction sector and home builders industry year-to-date [1][2]. Group 1: Stock Performance - PulteGroup's stock is up 0.5% over the past month and has gained 29.5% since the beginning of the year, compared to 19% for the Zacks Construction sector and 25.8% for the Zacks Building Products - Home Builders industry [1]. - The stock reached a new 52-week high of $136.47 in the previous session [1]. Group 2: Earnings Performance - PulteGroup has a strong record of positive earnings surprises, having beaten earnings consensus estimates in the last four quarters [2]. - In the latest earnings report on July 23, 2024, PulteGroup reported EPS of $3.58, exceeding the consensus estimate of $3.21, and beat the revenue estimate by 2.72% [2]. - For the current fiscal year, PulteGroup is expected to post earnings of $13.36 per share on revenues of $17.43 billion, reflecting a 13.99% change in EPS and an 8.49% change in revenues [2]. - For the next fiscal year, the company is projected to earn $13.58 per share on $18.35 billion in revenues, indicating a year-over-year change of 1.65% in EPS and 5.29% in revenues [2]. Group 3: Valuation Metrics - PulteGroup currently trades at 10X current fiscal year EPS estimates, aligning with the peer industry average of 10X [4]. - On a trailing cash flow basis, the stock trades at 10.6X compared to the peer group's average of 9.7X [4]. - The stock has a PEG ratio of 0.53, which does not place it among the top echelon of stocks from a value perspective [4]. Group 4: Zacks Rank - PulteGroup holds a Zacks Rank of 2 (Buy) due to rising earnings estimates [5]. - The company meets the criteria for selection, as it has a Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B [5]. - This suggests that PulteGroup shares may have further upside potential in the near term [5].

Group 1 - PulteGroup (PHM) has shown a year-to-date performance increase of 30.9%, outperforming the average gain of 19.8% in the Construction sector [2][3] - The Zacks Consensus Estimate for PulteGroup's full-year earnings has risen by 2.1% over the past 90 days, indicating improving analyst sentiment [2] - PulteGroup is part of the Building Products - Home Builders industry, which has an average year-to-date gain of 27.4%, further highlighting its strong performance [3] Group 2 - Sterling Infrastructure (STRL) has achieved a year-to-date return of 34.3%, also outperforming the Construction sector [2] - The consensus EPS estimate for Sterling Infrastructure has increased by 6.7% over the past three months, reflecting positive analyst outlook [3] - Sterling Infrastructure belongs to the Engineering - R and D Services industry, which has seen a year-to-date increase of 32.5% [3]

Affordability issues have largely impacted home buyer’s sentiments all through the year. Their incomes were also stretched due to elevated interest rates, a frustration for the housing market. However, with interest rate cut expectations growing, mortgage rates dropped to their lowest level this year.With mortgage rates sliding, things are hunky-dory for PulteGroup, Inc. (PHM) , KB Home (KBH) and Toll Brothers, Inc. (TOL) making them enticing buys.Mortgage Rates Fall Under 6.5%For the week ending on Aug 22, ...

Core Viewpoint - PulteGroup reported strong second-quarter 2024 earnings, with significant increases in earnings per share (EPS) and revenues, driven by a balanced operating model and strong cash flows [2][4]. Financial Performance - Adjusted EPS for Q2 2024 was $3.58, exceeding the consensus estimate of $3.21 by 11.5% and up 19.3% from $3.00 a year ago [4]. - Total revenues reached $4.6 billion, surpassing the consensus estimate of $4.48 billion by 2.7% and increasing 9.8% from $4.19 billion in the previous year [4]. - Homebuilding segment revenues rose 9.6% year over year to $4.49 billion, with home sale revenues also increasing by 9.6% to $4.45 billion [5]. - Financial Services segment revenues increased 21.1% year over year to $111.7 million, with pretax income rising to $63 million from $46 million a year ago [6]. Operational Highlights - The number of homes closed increased by 8% to 8,097 units, while the average selling price of homes delivered was $549,000, up 2% year over year [5]. - Home sales gross margin improved by 30 basis points to 29.9%, supported by strong homebuyer demand [6]. - New home orders declined 3.7% year over year to 7,649 units, but the value of new orders rose 2% to $4.4 billion [5]. Cash Flow and Capital Structure - Cash, cash equivalents, and restricted cash at the end of Q2 were $1.45 billion, down from $1.85 billion at the end of 2023 [7]. - Net cash provided by operating activities was $657.3 million in the first half of 2024, compared to $1.45 billion in the prior-year period [7]. - The company repurchased 2.8 million common shares for $314 million at an average price of $113.79 per share during the reported quarter [7]. Market Dynamics - Long-term market dynamics favor PulteGroup due to a structural shortage of homes from years of underbuilding, despite short-term impacts from interest rate movements [3]. - The company achieved a 27.1% return on equity over the past 12 months, reflecting effective management of sales price and pace [3]. Industry Comparison - PulteGroup operates within the Zacks Building Products - Home Builders industry, where competitor D.R. Horton reported revenues of $9.97 billion, a year-over-year increase of 2.5% [11]. - D.R. Horton has a Zacks Rank 3 (Hold), while PulteGroup holds a Zacks Rank 2 (Buy), indicating a more favorable outlook for PulteGroup [10][11].

The Federal Reserve has kept interest rates at record-high levels for quite some time, citing additional progress in price pressures ebbing toward the central bank’s target of 2%. However, July’s doomed jobs data raised recession fearmongering and compelled market participants to believe that the Fed has been a bit late in slashing interest rates.Nevertheless, cooling consumer and wholesale prices last month strengthened hopes that the Fed would initiate an interest rate cut in September, even if it won’t b ...

Core Insights - The housing market is experiencing a positive shift due to falling mortgage rates, which have dropped to their lowest level in over a year, enhancing the purchasing power of potential homebuyers [1][2][5] Mortgage Rate Trends - The average rate for a 30-year fixed mortgage decreased to 6.47% for the week ending August 8, down from 6.73% the previous week, marking the lowest level since May 2023 [2] - The 15-year fixed mortgage rate also fell to 5.63%, down from 5.99% the prior week [2] Economic Factors Influencing Rates - Mortgage rates declined following a disappointing jobs report that raised recession concerns, leading to expectations of a Federal Reserve interest rate cut in September [3][4] - The personal consumption expenditures index increased by 2.5% year over year in June, a slowdown compared to previous months, prompting discussions of potential interest rate cuts by the Fed [3] Housing Market Dynamics - The drop in mortgage rates is expected to shift the housing market from a seller's to a buyer's market, as affordability issues faced by homebuyers are alleviated [5] - Increased housing market turnover is anticipated as prospective buyers, particularly millennials, are ready to make purchases [5] Company Performance and Outlook - PulteGroup, Inc. (PHM) has a Zacks Rank of 2 and a VGM Score of B, with a projected earnings growth rate of 13.3% for the current year and a return on equity (ROE) of 25.7% [7] - KB Home (KBH) also holds a Zacks Rank of 2 and a VGM Score of B, with an expected earnings growth rate of 19.2% for the current year [8] - M/I Homes, Inc. (MHO) has a Zacks Rank of 1 and a VGM Score of B, with a projected earnings growth rate of 20.8% for the current year and a net profit margin of 12.7% [9] Stock Performance - Year-to-date stock performance shows PulteGroup gaining 18.3%, KB Home increasing by 27.6%, and M/I Homes rising by 3.4% [9]

Core Viewpoint - PulteGroup, Inc. reported strong second-quarter 2024 results, demonstrating resilience in housing demand and improvements in capital efficiency despite a challenging interest rate environment [1][5]. Financial Performance - The company achieved a 9.6% year-over-year increase in home sale revenues, totaling $4.45 billion, driven by an 8% rise in the number of homes closed and a 2% increase in average sales price (ASP) [4]. - Earnings per share (EPS) increased by 19%, reaching a record of $3.83 per share, with a return on equity of 27.1% over the trailing 12-month period [5][10]. - PulteGroup's stock rose 6% following the earnings report, outperforming the industry average gain of 3.6% [1][3]. Market Position and Strategy - The company maintains a balanced operating model, with a 50/50 split between build-to-order and speculative sales, allowing it to meet immediate demand while accommodating customization [8][9]. - PulteGroup's gross margin improved to 29.9%, reflecting strategic pricing dynamics and reduced incentives, despite challenges in certain markets [4][6]. Challenges and Outlook - Demand has been inconsistent, particularly in Florida and Texas, leading to a 4% decline in net new orders year-over-year [6][7]. - The company anticipates a gross margin of 29% for Q3 and 28.5%-29% for Q4, down from previous expectations due to market dynamics [6][10]. - Despite these challenges, PulteGroup expects long-term annual growth of 5% to 10%, supported by low housing inventory and favorable demographic trends [10][14]. Investment Potential - Analysts have increased their EPS estimates for 2024 to $13.28 from $12.85, indicating optimism about the stock's growth potential [10]. - The company's trailing 12-month return on equity (ROE) of 25.7% is significantly higher than the industry average of 18.3%, showcasing efficient use of shareholder funds [14]. - PulteGroup has a strong financial position, having paid quarterly dividends for nearly four decades, with a recent 5% increase in its dividend [15].