US Equity Market Update for September 24, 2015
KB Home and its peers
An analysis of KB Home’s income statement in 3Q15 follows:
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The net profit margins of KB Home (KBH), D.R. Horton (DHI), PulteGroup (PHM), Lennar (LEN), and Ryland Group (RYL) are 2.75%, 7.50%, 8.07%, 9.03%, and 6.52%, respectively.
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The EPS (earnings per share) of KB Home, D.R. Horton, PulteGroup, Lennar, and Ryland are $0.23, $0.60, $0.28, $0.97, and $0.73, respectively.
An analysis of KB Home’s valuation follows:
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The PE (price-to-earnings) ratios of KB Home, D.R. Horton, PulteGroup, Lennar, and Ryland are 1.65x, 16.57x, 14.06x, 15.96x, and 13.15x, respectively.
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The PBV (price-to-book value) ratios of KB Home, D.R. Horton, PulteGroup, Lennar, and Ryland are 0.83x, 1.99x, 1.55x, 1.98x, and 1.72x, respectively.
According to the above findings, the peers are way ahead of KB Home.
ETFs that invest in KB Home
The iShares Dow Jones US Home Construction ETF (ITB) invests 2.08% of its holdings in KB Home. ITB tracks a market-cap-weighted index of companies involved in the production and sale of materials used in home construction.
The First Trust Mid Cap Value AlphDex Fund (FNK) invests 0.89% of its holdings in KB Home. FNK uses a proprietary quant technology methodology to select value stocks from the S&P MidCap 400 Index. The index employs a tiered equal weighting scheme.
The First Trust Mid Cap Core AlphaDexFund (FNX) invests 0.52% of its holdings in KB Home. FNX seeks to outperform the US mid-cap sector by choosing stocks from the S&P MidCap 400 Index based on fundamental growth and value factors.
Comparing KB Home and its ETFs
An analysis of KB Home’s price movement follows:
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The YTD (year-to-date) price movements of KB Home, ITB, FNK, and FNX are -11.31%, 5.04%, -11.13%, and -6.59%, respectively.
An analysis of KB Home’s valuation follows:
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The PE ratios of KB Home, ITB, FNK, and FNX are 1.65x, 14.44x, 14.12x, and 18.45x, respectively.
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The PBV ratios of KB Home, ITB, FNK, and FNX are 0.83x, 2.31x, 1.35x, and 1.86x, respectively.
According to the above findings, the ETFs have outperformed KB Home based on the price movement, PE ratio, and PBV ratio.
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