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 119 industry peers in the Specialty Retail industry. While HD belongs to the best of the industry regarding profitability, 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.
HD had a positive operating cash flow in the past year.
In the past 5 years HD has always been profitable.
Each year in the past 5 years HD had a positive operating cash flow.
1.2 Ratios
HD's Return On Assets of 15.02% is amongst the best of the industry. HD outperforms 91.38% of its industry peers.
HD has a better Return On Equity (252.51%) than 100.00% of its industry peers.
HD has a better Return On Invested Capital (23.16%) than 90.52% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HD is significantly above the industry average of 12.39%.
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
Looking at the Profit Margin, with a value of 9.45%, HD belongs to the top of the industry, outperforming 90.52% of the companies in the same industry.
In the last couple of years the Profit Margin of HD has remained more or less at the same level.
HD's Operating Margin of 13.70% is amongst the best of the industry. HD outperforms 91.38% 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 42.24% of the companies in the same industry.
In the last couple of years the Gross Margin of HD has remained more or less at the same level.
| 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
With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HD 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
An Altman-Z score of 6.40 indicates that HD is not in any danger for bankruptcy at the moment.
The Altman-Z score of HD (6.40) is better than 91.38% of its industry peers.
HD has a debt to FCF ratio of 3.28. This is a good value and a sign of high solvency as HD would need 3.28 years to pay back of all of its debts.
HD has a better Debt to FCF ratio (3.28) than 71.55% 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.
The Debt to Equity ratio of HD (8.88) is worse than 81.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.88 | ||
| Debt/FCF | 3.28 | ||
| Altman-Z | 6.4 |
ROIC/WACC2.34
WACC9.91%
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.
Looking at the Current ratio, with a value of 1.13, HD is doing worse than 68.97% of the companies in the same industry.
A Quick Ratio of 0.31 indicates that HD may have some problems paying its short term obligations.
The Quick ratio of HD (0.31) is worse than 71.55% of its industry peers.
| 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.
Measured over the past years, HD shows a quite strong growth in Earnings Per Share. The EPS has been growing by 8.83% on average per year.
The Revenue has been growing slightly by 0.57% in the past year.
Measured over the past years, HD shows a small growth in Revenue. The Revenue has been growing by 7.13% on average per year.
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
Based on estimates for the next years, HD will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.50% on average per year.
The Revenue is expected to grow by 4.67% on average over the next years.
EPS Next Y1.28%
EPS Next 2Y3.1%
EPS Next 3Y5%
EPS Next 5Y8.5%
Revenue Next Year4.12%
Revenue Next 2Y3.78%
Revenue Next 3Y3.99%
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
The Price/Earnings ratio is 28.45, which means the current valuation is very expensive for HD.
The rest of the industry has a similar Price/Earnings ratio as HD.
The average S&P500 Price/Earnings ratio is at 28.42. HD is around the same levels.
Based on the Price/Forward Earnings ratio of 26.10, the valuation of HD can be described as expensive.
HD's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of HD to the average of the S&P500 Index (24.39), we can say HD is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.45 | ||
| Fwd PE | 26.1 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HD.
68.10% of the companies in the same industry are more expensive than HD, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.02 | ||
| EV/EBITDA | 19.14 |
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.
HD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)22.29
PEG (5Y)3.22
EPS Next 2Y3.1%
EPS Next 3Y5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.17%, HD has a reasonable but not impressive dividend return.
HD's Dividend Yield is rather good when compared to the industry average which is at 3.19. HD pays more dividend than 86.21% of the companies 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 | 2.17% |
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 2Y3.1%
EPS Next 3Y5%
HOME DEPOT INC
NYSE:HD (1/28/2025, 8:04:00 PM)
After market: 418.83 0 (0%)418.83
-6.04 (-1.42%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners72.11%
Inst Owner Change-1.26%
Ins Owners0.04%
Ins Owner Change-0.56%
Market Cap416.05B
Analysts77.96
Price Target445.17 (6.29%)
Short Float %1.1%
Short Ratio3.28
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
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)0.67%
PT rev (3m)13.75%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-8.67%
EPS NY rev (1m)0%
EPS NY rev (3m)0.18%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)3.49%
Revenue NY rev (1m)0.12%
Revenue NY rev (3m)1.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 28.45 | ||
| Fwd PE | 26.1 | ||
| P/S | 2.69 | ||
| P/FCF | 25.02 | ||
| P/OCF | 20.94 | ||
| P/B | 71.91 | ||
| P/tB | N/A | ||
| EV/EBITDA | 19.14 |
EPS(TTM)14.72
EY3.51%
EPS(NY)16.05
Fwd EY3.83%
FCF(TTM)16.74
FCFY4%
OCF(TTM)20
OCFY4.78%
SpS155.63
BVpS5.82
TBVpS-22.91
PEG (NY)22.29
PEG (5Y)3.22
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 | 6.4 |
F-Score6
WACC9.91%
ROIC/WACC2.34
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 Y1.28%
EPS Next 2Y3.1%
EPS Next 3Y5%
EPS Next 5Y8.5%
Revenue 1Y (TTM)0.57%
Revenue growth 3Y4.94%
Revenue growth 5Y7.13%
Sales Q2Q%6.65%
Revenue Next Year4.12%
Revenue Next 2Y3.78%
Revenue Next 3Y3.99%
Revenue Next 5Y4.67%
EBIT growth 1Y-5.04%
EBIT growth 3Y2.27%
EBIT growth 5Y6.57%
EBIT Next Year15.35%
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%