KBH vs. DHI: Which Stock Is the Better Value Option?

Core Insights - KB Home (KBH) has a stronger Zacks Rank of 2 (Buy) compared to D.R. Horton (DHI) which has a Zacks Rank of 3 (Hold), indicating a better earnings outlook for KBH [1] - Value investors utilize various valuation metrics to assess whether a company is undervalued, with KBH showing more favorable metrics than DHI [2] Valuation Metrics - KBH has a forward P/E ratio of 9.60, significantly lower than DHI's forward P/E of 13.37, suggesting KBH is more attractively priced [2] - The PEG ratio for KBH is 0.81, while DHI's PEG ratio is 0.87, indicating that KBH offers better value relative to its expected earnings growth [2] - KBH's P/B ratio stands at 1.52, compared to DHI's P/B of 2.43, further supporting the argument that KBH is undervalued [2] Overall Value Assessment - Based on the valuation metrics, KBH earns a Value grade of A, while DHI receives a Value grade of C, highlighting KBH as the superior value option at this time [3]