HOME DEPOT INC (HD) Stock Fundamental Analysis
NYSE:HD - New York Stock Exchange, Inc. - US4370761029 - Common Stock - Currency: USD
Taking everything into account, HD scores 5 out of 10 in our fundamental rating. HD was compared to 121 industry peers in the Specialty Retail industry. HD has an excellent profitability rating, but there are some minor concerns on its financial health. While showing a medium growth rate, HD is valued expensive at the moment.
1. Profitability
1.1 Basic Checks
HD had positive earnings in the past year.
In the past year HD had a positive cash flow from operations.
HD had positive earnings in each of the past 5 years.
In the past 5 years HD always reported a positive cash flow from operatings.
1.2 Ratios
Looking at the Return On Assets, with a value of 15.02%, HD belongs to the top of the industry, outperforming 90.68% of the companies in the same industry.
HD has a Return On Equity of 252.51%. This is amongst the best in the industry. HD outperforms 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.16%, HD belongs to the top of the industry, outperforming 90.68% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HD is significantly above the industry average of 12.33%.
The last Return On Invested Capital (23.16%) for HD is well below the 3 year average (34.87%), which needs to be investigated, but indicates that HD had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.02% | ||
| ROE | 252.51% | ||
| ROIC | 23.16% |
ROA(3y)21.68%
ROA(5y)21.04%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)34.87%
ROIC(5y)34.55%
1.3 Margins
HD's Profit Margin of 9.45% is amongst the best of the industry. HD outperforms 90.68% of its industry peers.
HD's Profit Margin has been stable in the last couple of years.
The Operating Margin of HD (13.70%) is better than 91.53% of its industry peers.
In the last couple of years the Operating Margin of HD has remained more or less at the same level.
With a Gross Margin value of 33.49%, HD perfoms like the industry average, outperforming 42.37% of the companies in the same industry.
HD's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.7% | ||
| PM (TTM) | 9.45% | ||
| GM | 33.49% |
OM growth 3Y-2.55%
OM growth 5Y-0.52%
PM growth 3Y0.61%
PM growth 5Y-0.71%
GM growth 3Y-0.56%
GM growth 5Y-0.57%
2. Health
2.1 Basic Checks
HD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HD has less shares outstanding
Compared to 5 years ago, HD has less shares outstanding
The debt/assets ratio for HD is higher compared to a year ago.
2.2 Solvency
HD has an Altman-Z score of 6.18. This indicates that HD is financially healthy and has little risk of bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 6.18, HD belongs to the top of the industry, outperforming 94.92% of the companies in the same industry.
The Debt to FCF ratio of HD is 3.28, which is a good value as it means it would take HD, 3.28 years of fcf income to pay off all of its debts.
HD's Debt to FCF ratio of 3.28 is fine compared to the rest of the industry. HD outperforms 69.49% of its industry peers.
A Debt/Equity ratio of 8.88 is on the high side and indicates that HD has dependencies on debt financing.
HD's Debt to Equity ratio of 8.88 is on the low side compared to the rest of the industry. HD is outperformed by 81.36% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.88 | ||
| Debt/FCF | 3.28 | ||
| Altman-Z | 6.18 |
ROIC/WACC2.38
WACC9.73%
2.3 Liquidity
HD has a Current Ratio of 1.13. This is a normal value and indicates that HD is financially healthy and should not expect problems in meeting its short term obligations.
HD has a worse Current ratio (1.13) than 68.64% of its industry peers.
HD has a Quick Ratio of 1.13. This is a bad value and indicates that HD is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.31, HD is not doing good in the industry: 72.03% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
The earnings per share for HD have decreased by -5.52% in the last year.
HD shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.83% yearly.
Looking at the last year, HD shows a small growth in Revenue. The Revenue has grown by 0.57% in the last year.
HD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.13% yearly.
EPS 1Y (TTM)-5.52%
EPS 3Y8.17%
EPS 5Y8.83%
EPS Q2Q%-3.67%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y4.94%
Revenue growth 5Y7.13%
Sales Q2Q%6.65%
3.2 Future
HD is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.50% yearly.
HD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 4.67% yearly.
EPS Next Y1.31%
EPS Next 2Y3.03%
EPS Next 3Y5.07%
EPS Next 5Y8.5%
Revenue Next Year4.09%
Revenue Next 2Y3.7%
Revenue Next 3Y3.98%
Revenue Next 5Y4.67%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
4. Valuation
4.1 Price/Earnings Ratio
HD is valuated quite expensively with a Price/Earnings ratio of 26.63.
HD's Price/Earnings is on the same level as the industry average.
When comparing the Price/Earnings ratio of HD to the average of the S&P500 Index (29.01), we can say HD is valued inline with the index average.
A Price/Forward Earnings ratio of 24.46 indicates a rather expensive valuation of HD.
HD's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 22.40. HD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.63 | ||
| Fwd PE | 24.46 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HD is on the same level as its industry peers.
Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than the industry average as 68.64% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.42 | ||
| EV/EBITDA | 17.75 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HD does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of HD may justify a higher PE ratio.
PEG (NY)20.31
PEG (5Y)3.02
EPS Next 2Y3.03%
EPS Next 3Y5.07%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.28%.
Compared to an average industry Dividend Yield of 4.36, HD pays a better dividend. On top of this HD pays more dividend than 83.05% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.27, HD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
5.2 History
On average, the dividend of HD grows each year by 14.97%, which is quite nice.
HD has been paying a dividend for at least 10 years, so it has a reliable track record.
HD has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)14.97%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
HD pays out 60.05% of its income as dividend. This is not a sustainable payout ratio.
HD's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP60.05%
EPS Next 2Y3.03%
EPS Next 3Y5.07%
NYSE:HD (2/28/2025, 2:20:05 PM)
392.04
+1.77 (+0.45%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners72.73%
Inst Owner Change0.96%
Ins Owners0.04%
Ins Owner Change-0.31%
Market Cap389.44B
Analysts77.92
Price Target445.16 (13.55%)
Short Float %1.08%
Short Ratio3.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.28% |
Yearly Dividend8.35
Dividend Growth(5Y)14.97%
DP60.05%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-1.37%
Min EPS beat(2)-2.12%
Max EPS beat(2)-0.62%
EPS beat(4)0
Avg EPS beat(4)-1.46%
Min EPS beat(4)-2.12%
Max EPS beat(4)-0.62%
EPS beat(8)1
Avg EPS beat(8)-1.31%
EPS beat(12)2
Avg EPS beat(12)-0.44%
EPS beat(16)4
Avg EPS beat(16)1.6%
Revenue beat(2)0
Avg Revenue beat(2)-1.68%
Min Revenue beat(2)-2.66%
Max Revenue beat(2)-0.7%
Revenue beat(4)0
Avg Revenue beat(4)-2.36%
Min Revenue beat(4)-3.55%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-2.78%
Revenue beat(12)1
Avg Revenue beat(12)-1.87%
Revenue beat(16)4
Avg Revenue beat(16)-1.02%
PT rev (1m)0%
PT rev (3m)1.82%
EPS NQ rev (1m)0.33%
EPS NQ rev (3m)-8.37%
EPS NY rev (1m)0.03%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)0.55%
Revenue NQ rev (3m)4.06%
Revenue NY rev (1m)-0.03%
Revenue NY rev (3m)0.91%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.63 | ||
| Fwd PE | 24.46 | ||
| P/S | 2.52 | ||
| P/FCF | 23.42 | ||
| P/OCF | 19.6 | ||
| P/B | 67.31 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.75 |
EPS(TTM)14.72
EY3.75%
EPS(NY)16.03
Fwd EY4.09%
FCF(TTM)16.74
FCFY4.27%
OCF(TTM)20
OCFY5.1%
SpS155.63
BVpS5.82
TBVpS-22.91
PEG (NY)20.31
PEG (5Y)3.02
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.02% | ||
| ROE | 252.51% | ||
| ROCE | 31.06% | ||
| ROIC | 23.16% | ||
| ROICexc | 23.69% | ||
| ROICexgc | 40.82% | ||
| OM | 13.7% | ||
| PM (TTM) | 9.45% | ||
| GM | 33.49% | ||
| FCFM | 10.76% |
ROA(3y)21.68%
ROA(5y)21.04%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)34.87%
ROIC(5y)34.55%
ROICexc(3y)36.99%
ROICexc(5y)37.6%
ROICexgc(3y)48.62%
ROICexgc(5y)46.88%
ROCE(3y)46.27%
ROCE(5y)45.96%
ROICexcg growth 3Y-3.61%
ROICexcg growth 5Y-2.66%
ROICexc growth 3Y-5.92%
ROICexc growth 5Y-6.17%
OM growth 3Y-2.55%
OM growth 5Y-0.52%
PM growth 3Y0.61%
PM growth 5Y-0.71%
GM growth 3Y-0.56%
GM growth 5Y-0.57%
F-Score6
Asset Turnover1.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.88 | ||
| Debt/FCF | 3.28 | ||
| Debt/EBITDA | 2.08 | ||
| Cap/Depr | 90.46% | ||
| Cap/Sales | 2.1% | ||
| Interest Coverage | 10.89 | ||
| Cash Conversion | 80.27% | ||
| Profit Quality | 113.83% | ||
| Current Ratio | 1.13 | ||
| Quick Ratio | 0.31 | ||
| Altman-Z | 6.18 |
F-Score6
WACC9.73%
ROIC/WACC2.38
Cap/Depr(3y)97.95%
Cap/Depr(5y)101.65%
Cap/Sales(3y)1.93%
Cap/Sales(5y)2.02%
Profit Quality(3y)90.31%
Profit Quality(5y)99.23%
High Growth Momentum
Growth
EPS 1Y (TTM)-5.52%
EPS 3Y8.17%
EPS 5Y8.83%
EPS Q2Q%-3.67%
EPS Next Y1.31%
EPS Next 2Y3.03%
EPS Next 3Y5.07%
EPS Next 5Y8.5%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y4.94%
Revenue growth 5Y7.13%
Sales Q2Q%6.65%
Revenue Next Year4.09%
Revenue Next 2Y3.7%
Revenue Next 3Y3.98%
Revenue Next 5Y4.67%
EBIT growth 1Y-5.04%
EBIT growth 3Y2.27%
EBIT growth 5Y6.57%
EBIT Next Year15.41%
EBIT Next 3Y8.45%
EBIT Next 5Y6.44%
FCF growth 1Y63.67%
FCF growth 3Y3.1%
FCF growth 5Y10.85%
OCF growth 1Y50.48%
OCF growth 3Y3.97%
OCF growth 5Y9.97%