HOME DEPOT INC (HDI.DE) Stock Fundamental Analysis
Europe - Frankfurt Stock Exchange - FRA:HDI - US4370761029 - Common Stock
318.75 EUR
-6.05 (-1.86%)
HDI gets a fundamental rating of 5 out of 10. The analysis compared the fundamentals against 56 industry peers in the Specialty Retail industry. HDI has an excellent profitability rating, but there are concerns on its financial health. HDI is valued expensive and it does not seem to be growing.
1. Profitability
1.1 Basic Checks
- In the past year HDI was profitable.
- HDI had a positive operating cash flow in the past year.
- HDI had positive earnings in each of the past 5 years.
- In the past 5 years HDI always reported a positive cash flow from operatings.
1.2 Ratios
- With an excellent Return On Assets value of 13.72%, HDI belongs to the best of the industry, outperforming 92.86% of the companies in the same industry.
- The Return On Equity of HDI (120.35%) is better than 98.21% of its industry peers.
- HDI has a better Return On Invested Capital (21.84%) than 92.86% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HDI is significantly above the industry average of 10.20%.
- The 3 year average ROIC (29.60%) for HDI is well above the current ROIC(21.84%). The reason for the recent decline needs to be investigated.
| 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
- HDI's Profit Margin of 8.77% is amongst the best of the industry. HDI outperforms 91.07% of its industry peers.
- HDI's Profit Margin has declined in the last couple of years.
- HDI has a better Operating Margin (12.96%) than 94.64% of its industry peers.
- In the last couple of years the Operating Margin of HDI has remained more or less at the same level.
- HDI has a Gross Margin of 33.36%. This is comparable to the rest of the industry: HDI outperforms 46.43% of its industry peers.
- In the last couple of years the Gross Margin of HDI has remained more or less at the same level.
| 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
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HDI is creating value.
- The number of shares outstanding for HDI has been increased compared to 1 year ago.
- HDI has less shares outstanding than it did 5 years ago.
- The debt/assets ratio for HDI has been reduced compared to a year ago.
2.2 Solvency
- The Debt to FCF ratio of HDI is 4.02, which is a neutral value as it means it would take HDI, 4.02 years of fcf income to pay off all of its debts.
- HDI has a Debt to FCF ratio of 4.02. This is in the better half of the industry: HDI outperforms 67.86% of its industry peers.
- HDI has a Debt/Equity ratio of 4.09. This is a high value indicating a heavy dependency on external financing.
- HDI has a worse Debt to Equity ratio (4.09) than 83.93% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.32
WACC9.41%
2.3 Liquidity
- A Current Ratio of 1.05 indicates that HDI should not have too much problems paying its short term obligations.
- HDI's Current ratio of 1.05 is on the low side compared to the rest of the industry. HDI is outperformed by 62.50% of its industry peers.
- HDI has a Quick Ratio of 1.05. This is a bad value and indicates that HDI is not financially healthy enough and could expect problems in meeting its short term obligations.
- HDI has a Quick ratio of 0.29. This is amonst the worse of the industry: HDI underperforms 80.36% 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.
- HDI shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.80% yearly.
- The Revenue has been growing slightly by 7.50% in the past year.
- Measured over the past years, HDI shows a small growth in Revenue. The Revenue has been growing by 7.67% on average per year.
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
- HDI is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.01% yearly.
- HDI is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.78% yearly.
EPS Next Y0.14%
EPS Next 2Y2.03%
EPS Next 3Y4.29%
EPS Next 5Y6.01%
Revenue Next Year3.7%
Revenue Next 2Y3.84%
Revenue Next 3Y4.02%
Revenue Next 5Y3.78%
3.3 Evolution
- When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
- 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
- HDI is valuated quite expensively with a Price/Earnings ratio of 25.16.
- Based on the Price/Earnings ratio, HDI is valued a bit cheaper than 66.07% of the companies in the same industry.
- The average S&P500 Price/Earnings ratio is at 28.87. HDI is around the same levels.
- The Price/Forward Earnings ratio is 24.29, 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 25.96. HDI is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.16 | ||
| Fwd PE | 24.29 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as HDI.
- HDI's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.97 | ||
| EV/EBITDA | 16.96 |
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.
- The excellent profitability rating of HDI may justify a higher PE ratio.
PEG (NY)175.18
PEG (5Y)3.23
EPS Next 2Y2.03%
EPS Next 3Y4.29%
5. Dividend
5.1 Amount
- With a Yearly Dividend Yield of 2.41%, HDI has a reasonable but not impressive dividend return.
- HDI's Dividend Yield is a higher than the industry average which is at 1.47.
- Compared to an average S&P500 Dividend Yield of 1.82, HDI pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
5.2 History
- The dividend of HDI is nicely growing with an annual growth rate of 10.49%!
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 2Y2.03%
EPS Next 3Y4.29%
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%.