HOME DEPOT INC (HDI.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:HDI - US4370761029 - Common Stock
324.75 EUR
-2.3 (-0.7%)
HDI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 61 industry peers in the Specialty Retail industry. While HDI has a great profitability rating, there are quite some concerns on its financial health. HDI does not seem to be growing, but still is valued expensively.
1. Profitability
1.1 Basic Checks
- HDI had positive earnings in the past year.
- In the past year HDI had a positive cash flow from operations.
- In the past 5 years HDI has always been profitable.
- Each year in the past 5 years HDI had a positive operating cash flow.
1.2 Ratios
- HDI's Return On Assets of 13.72% is amongst the best of the industry. HDI outperforms 91.80% of its industry peers.
- HDI has a Return On Equity of 120.35%. This is amongst the best in the industry. HDI outperforms 98.36% of its industry peers.
- The Return On Invested Capital of HDI (21.84%) is better than 91.80% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HDI is significantly above the industry average of 10.05%.
- The last Return On Invested Capital (21.84%) for HDI is well below the 3 year average (29.60%), which needs to be investigated, but indicates that HDI had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.72% | ||
| ROE | 120.35% | ||
| ROIC | 21.84% |
ROA(3y)19.19%
ROA(5y)19.73%
ROE(3y)922.84%
ROE(5y)N/A
ROIC(3y)29.6%
ROIC(5y)32.3%
1.3 Margins
- Looking at the Profit Margin, with a value of 8.77%, HDI belongs to the top of the industry, outperforming 88.52% of the companies in the same industry.
- HDI's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 12.96%, HDI belongs to the top of the industry, outperforming 93.44% of the companies in the same industry.
- In the last couple of years the Operating Margin of HDI has remained more or less at the same level.
- HDI's Gross Margin of 33.36% is in line compared to the rest of the industry. HDI outperforms 49.18% of its industry peers.
- HDI's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.96% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.36% |
OM growth 3Y-4.34%
OM growth 5Y-1.25%
PM growth 3Y-5.13%
PM growth 5Y-1.87%
GM growth 3Y-0.21%
GM growth 5Y-0.39%
2. Health
2.1 Basic Checks
- HDI has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- HDI has more shares outstanding than it did 1 year ago.
- The number of shares outstanding for HDI has been reduced compared to 5 years ago.
- HDI has a better debt/assets ratio than last year.
2.2 Solvency
- HDI has a debt to FCF ratio of 4.02. This is a neutral value as HDI would need 4.02 years to pay back of all of its debts.
- HDI's Debt to FCF ratio of 4.02 is fine compared to the rest of the industry. HDI outperforms 63.93% of its industry peers.
- A Debt/Equity ratio of 4.09 is on the high side and indicates that HDI has dependencies on debt financing.
- With a Debt to Equity ratio value of 4.09, HDI is not doing good in the industry: 86.89% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.3
WACC9.49%
2.3 Liquidity
- A Current Ratio of 1.05 indicates that HDI should not have too much problems paying its short term obligations.
- HDI has a worse Current ratio (1.05) than 65.57% of its industry peers.
- A Quick Ratio of 0.29 indicates that HDI may have some problems paying its short term obligations.
- HDI has a Quick ratio of 0.29. This is amonst the worse of the industry: HDI underperforms 83.61% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
- The Earnings Per Share has been growing slightly by 1.90% over the past year.
- The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
- HDI shows a small growth in Revenue. In the last year, the Revenue has grown by 7.50%.
- HDI shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.67% yearly.
EPS 1Y (TTM)1.9%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%1.91%
Revenue 1Y (TTM)7.5%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%2.82%
3.2 Future
- The Earnings Per Share is expected to grow by 6.01% on average over the next years.
- The Revenue is expected to grow by 3.78% on average over the next years.
EPS Next Y0.14%
EPS Next 2Y1.98%
EPS Next 3Y4.25%
EPS Next 5Y6.01%
Revenue Next Year3.59%
Revenue Next 2Y3.84%
Revenue Next 3Y4.02%
Revenue Next 5Y3.78%
3.3 Evolution
- The EPS growth rate is decreasing: in the next years the growth will be less 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
- With a Price/Earnings ratio of 25.35, HDI can be considered very expensive at the moment.
- HDI's Price/Earnings ratio is a bit cheaper when compared to the industry. HDI is cheaper than 68.85% of the companies in the same industry.
- HDI's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 27.21.
- The Price/Forward Earnings ratio is 24.50, which indicates a rather expensive current valuation of HDI.
- HDI's Price/Forward Earnings ratio is in line with the industry average.
- The average S&P500 Price/Forward Earnings ratio is at 24.26. HDI is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.35 | ||
| Fwd PE | 24.5 |
4.2 Price Multiples
- HDI's Enterprise Value to EBITDA is on the same level as the industry average.
- The rest of the industry has a similar Price/Free Cash Flow ratio as HDI.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.17 | ||
| EV/EBITDA | 16.89 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HDI does not grow enough to justify the current Price/Earnings ratio.
- HDI has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)177.72
PEG (5Y)3.25
EPS Next 2Y1.98%
EPS Next 3Y4.25%
5. Dividend
5.1 Amount
- HDI has a Yearly Dividend Yield of 2.43%.
- Compared to an average industry Dividend Yield of 1.26, HDI pays a bit more dividend than its industry peers.
- HDI's Dividend Yield is a higher than the S&P500 average which is at 1.82.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.43% |
5.2 History
- On average, the dividend of HDI grows each year by 10.49%, which is quite nice.
Dividend Growth(5Y)10.49%
Div Incr Years6
Div Non Decr Years6
5.3 Sustainability
- 62.39% of the earnings are spent on dividend by HDI. This is not a sustainable payout ratio.
- The dividend of HDI is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP62.39%
EPS Next 2Y1.98%
EPS Next 3Y4.25%
HOME DEPOT INC / HDI.DE FAQ
Can you provide the ChartMill fundamental rating for HOME DEPOT INC?
ChartMill assigns a fundamental rating of 5 / 10 to HDI.DE.
Can you provide the valuation status for HOME DEPOT INC?
ChartMill assigns a valuation rating of 3 / 10 to HOME DEPOT INC (HDI.DE). This can be considered as Overvalued.
What is the profitability of HDI stock?
HOME DEPOT INC (HDI.DE) has a profitability rating of 8 / 10.
What is the expected EPS growth for HOME DEPOT INC (HDI.DE) stock?
The Earnings per Share (EPS) of HOME DEPOT INC (HDI.DE) is expected to grow by 0.14% in the next year.
How sustainable is the dividend of HOME DEPOT INC (HDI.DE) stock?
The dividend rating of HOME DEPOT INC (HDI.DE) is 4 / 10 and the dividend payout ratio is 62.39%.