PulteGroup

Methodology

PulteGroup's homebuilding earnings are highly cyclical with housing markets and mortgage rates, requiring normalization to mid-cycle profitability levels. Focus on active adult communities and built-to-rent provide some differentiation. Evaluate earnings power across housing cycles rather than extrapolating current conditions during booms or busts.

Methodology

PulteGroup can show misleadingly low PEG ratios during housing booms when growth accelerates, or high ratios during downturns despite recovery potential. The metric works best comparing to homebuilder peers like Lennar while adjusting for cycle positioning. Consistent land strategy and capital allocation can justify modest valuation premiums.

Methodology

PulteGroup offers a modest dividend with management emphasizing buybacks as the primary capital return during profitable periods. The dividend adds some value though capital appreciation potential dominates. For homebuilders, through-cycle returns and capital allocation discipline matter more than current yield given earnings volatility.