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DFH vs. NVR: Which Stock Should Value Investors Buy Now?

Investors interested in Building Products - Home Builders stocks are likely familiar with Dream Finders Homes Inc. (DFH) and NVR (NVR). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.

Everyone has their own methods for finding great value opportunities, but our model includes pairing an impressive grade in the Value category of our Style Scores system with a strong Zacks Rank. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits.

Currently, both Dream Finders Homes Inc. and NVR are holding a Zacks Rank of # 1 (Strong Buy). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that both of these companies have improving earnings outlooks. But this is only part of the picture for value investors.

Value investors analyze a variety of traditional, tried-and-true metrics to help find companies that they believe are undervalued at their current share price levels.

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Our Value category highlights undervalued companies by looking at a variety of key metrics, including the popular P/E ratio, as well as the P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that have been used by value investors for years.

DFH currently has a forward P/E ratio of 11.18, while NVR has a forward P/E of 15.70. We also note that DFH has a PEG ratio of 1.04. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. NVR currently has a PEG ratio of 2.85.

Another notable valuation metric for DFH is its P/B ratio of 3.83. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, NVR has a P/B of 5.70.

Based on these metrics and many more, DFH holds a Value grade of A, while NVR has a Value grade of D.

Both DFH and NVR are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that DFH is the superior value option right now.

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Dream Finders Homes, Inc. (DFH) : Free Stock Analysis Report

NVR, Inc. (NVR) : Free Stock Analysis Report

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Zacks Investment Research