HOME DEPOT INC (HD)
US4370761029 - Common Stock
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 scores excellent on profitability, 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.
HD had a positive operating cash flow in the past year.
Each year in the past 5 years HD has been profitable.
Each year in the past 5 years HD had a positive operating cash flow.
1.2 Ratios
HD has a better Return On Assets (15.02%) than 91.67% of its industry peers.
With an excellent Return On Equity value of 252.51%, HD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
HD's Return On Invested Capital of 23.16% is amongst the best of the industry. HD outperforms 90.83% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for HD is significantly above the industry average of 12.29%.
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 has a better Profit Margin (9.45%) than 90.83% of its industry peers.
In the last couple of years the Profit Margin of HD has remained more or less at the same level.
Looking at the Operating Margin, with a value of 13.70%, HD belongs to the top of the industry, outperforming 91.67% of the companies in the same industry.
HD's Operating Margin has been stable in the last couple of years.
HD's Gross Margin of 33.49% is in line compared to the rest of the industry. HD outperforms 43.33% of its industry peers.
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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HD is creating value.
The number of shares outstanding for HD has been reduced compared to 1 year ago.
Compared to 5 years ago, HD has less shares outstanding
HD has a worse debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 6.19 indicates that HD is not in any danger for bankruptcy at the moment.
HD has a better Altman-Z score (6.19) than 91.67% of its industry peers.
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 71.67% of its industry peers.
HD has a Debt/Equity ratio of 8.88. This is a high value indicating a heavy dependency on external financing.
HD has a worse Debt to Equity ratio (8.88) than 80.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 8.88 | ||
| Debt/FCF | 3.28 | ||
| Altman-Z | 6.19 |
ROIC/WACC2.35
WACC9.85%
2.3 Liquidity
A Current Ratio of 1.13 indicates that HD should not have too much problems paying its short term obligations.
HD has a Current ratio of 1.13. This is in the lower half of the industry: HD underperforms 67.50% 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.
HD has a Quick ratio of 0.31. This is in the lower half of the industry: HD underperforms 72.50% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.13 | ||
| Quick Ratio | 0.31 |
3. Growth
3.1 Past
HD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -5.52%.
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.
The Revenue has been growing slightly by 7.13% on average over the past years.
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.
Based on estimates for the next years, HD will show a small growth in Revenue. The Revenue will grow by 4.67% on average per year.
EPS Next Y1.28%
EPS Next 2Y3.1%
EPS Next 3Y5%
EPS Next 5Y8.5%
Revenue Next Year4%
Revenue Next 2Y3.71%
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.
The Revenue growth rate is decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
HD is valuated quite expensively with a Price/Earnings ratio of 26.66.
Compared to the rest of the industry, the Price/Earnings ratio of HD is on the same level as its industry peers.
HD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.29.
A Price/Forward Earnings ratio of 24.45 indicates a rather expensive valuation of HD.
HD's Price/Forward Earnings ratio is in line with the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.78. HD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.66 | ||
| Fwd PE | 24.45 |
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 68.33% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 23.44 | ||
| EV/EBITDA | 17.84 |
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)20.89
PEG (5Y)3.02
EPS Next 2Y3.1%
EPS Next 3Y5%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.34%, HD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 3.46, HD pays a better dividend. On top of this HD pays more dividend than 85.00% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.36, HD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
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
60.05% of the earnings are spent on dividend by HD. 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 (12/23/2024, 8:09:56 PM)
After market: 392.25 -0.2 (-0.05%)392.45
-0.15 (-0.04%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners72.11%
Inst Owner Change2.53%
Ins Owners0.04%
Ins Owner Change-0.56%
Market Cap389.84B
Analysts77.96
Price Target442.2 (12.68%)
Short Float %1.06%
Short Ratio3.2
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.34% |
Dividend Growth(5Y)14.97%
DP60.05%
Div Incr Years15
Div Non Decr Years34
Ex-Date
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)1.14%
PT rev (3m)14.65%
EPS NQ rev (1m)-1.01%
EPS NQ rev (3m)-8.67%
EPS NY rev (1m)0.06%
EPS NY rev (3m)0.18%
Revenue NQ rev (1m)0.05%
Revenue NQ rev (3m)3.49%
Revenue NY rev (1m)0.82%
Revenue NY rev (3m)0.88%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.66 | ||
| Fwd PE | 24.45 | ||
| P/S | 2.52 | ||
| P/FCF | 23.44 | ||
| P/OCF | 19.62 | ||
| P/B | 67.38 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.84 |
EPS(TTM)14.72
EY3.75%
EPS(NY)16.05
Fwd EY4.09%
FCF(TTM)16.74
FCFY4.27%
OCF(TTM)20
OCFY5.1%
SpS155.63
BVpS5.82
TBVpS-22.91
PEG (NY)20.89
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 | 6.19 |
F-Score6
WACC9.85%
ROIC/WACC2.35
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%
Revenue Next 2Y3.71%
Revenue Next 3Y3.99%
Revenue Next 5Y4.67%
EBIT growth 1Y-5.04%
EBIT growth 3Y2.27%
EBIT growth 5Y6.57%
EBIT Next Year15.52%
EBIT Next 3Y8.64%
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%