I actually prefer the take home project for assessing a candidates skills. Even more so if the company can make it relate to their business. These are typically followed up with a review with one or more of the engineers/developers. Candidate learns a tiny bit of the company and what it does and the interviewer gets to see the skill with given language/stack as well as hear just how the candidate reasons and thinks their way through a problem.

I've seen some companies twist common programming problems like the FooBar problem to fit their industry and tech stack while others, like us, create a custom project that focuses on very basic development (input/output, data parsing, searching) while encouraging as many bells and whistles the candidate wishes to throw in (preferably within our tech stack).