HOME DEPOT INC (HD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HD - US4370761029 - Common Stock
349.06 USD
-0.23 (-0.07%)
349.5 USD
+0.44 (+0.13%)
Taking everything into account, HD scores 5 out of 10 in our fundamental rating. HD was compared to 122 industry peers in the Specialty Retail industry. HD has an excellent profitability rating, but there are concerns on its financial health. HD is valued correctly, but it does not seem to be growing.
1. Profitability
1.1 Basic Checks
In the past year HD was profitable.
HD had a positive operating cash flow in the past year.
Each year in the past 5 years HD has been profitable.
In the past 5 years HD always reported a positive cash flow from operatings.
1.2 Ratios
With an excellent Return On Assets value of 13.72%, HD belongs to the best of the industry, outperforming 90.98% of the companies in the same industry.
Looking at the Return On Equity, with a value of 120.35%, HD belongs to the top of the industry, outperforming 99.18% of the companies in the same industry.
HD has a Return On Invested Capital of 21.84%. This is amongst the best in the industry. HD outperforms 88.52% 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 12.14%.
The last Return On Invested Capital (21.84%) for HD is well below the 3 year average (29.60%), which needs to be investigated, but indicates that HD 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
HD's Profit Margin of 8.77% is amongst the best of the industry. HD outperforms 86.89% of its industry peers.
HD's Profit Margin has declined in the last couple of years.
HD has a better Operating Margin (12.96%) than 87.70% of its industry peers.
HD's Operating Margin has been stable in the last couple of years.
HD has a Gross Margin (33.36%) which is comparable to the rest of the industry.
HD'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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HD is creating value.
Compared to 1 year ago, HD has more shares outstanding
Compared to 5 years ago, HD has less shares outstanding
Compared to 1 year ago, HD has an improved debt to assets ratio.
2.2 Solvency
The Debt to FCF ratio of HD is 4.02, which is a neutral value as it means it would take HD, 4.02 years of fcf income to pay off all of its debts.
HD has a Debt to FCF ratio of 4.02. This is in the better half of the industry: HD outperforms 69.67% of its industry peers.
A Debt/Equity ratio of 4.09 is on the high side and indicates that HD has dependencies on debt financing.
HD has a Debt to Equity ratio of 4.09. This is in the lower half of the industry: HD underperforms 78.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.31
WACC9.46%
2.3 Liquidity
HD has a Current Ratio of 1.05. 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 1.05, HD is doing worse than 71.31% of the companies in the same industry.
A Quick Ratio of 0.29 indicates that HD may have some problems paying its short term obligations.
Looking at the Quick ratio, with a value of 0.29, HD is doing worse than 76.23% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
HD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.90%.
The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
HD shows a small growth in Revenue. In the last year, the Revenue has grown by 7.50%.
The Revenue has been growing slightly by 7.67% on average over the past years.
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 6.80% on average over the next years.
HD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.96% yearly.
EPS Next Y0.14%
EPS Next 2Y1.98%
EPS Next 3Y4.25%
EPS Next 5Y6.8%
Revenue Next Year3.59%
Revenue Next 2Y3.84%
Revenue Next 3Y4%
Revenue Next 5Y3.96%
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 stable.
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 rather expensively with a Price/Earnings ratio of 23.27.
Based on the Price/Earnings ratio, HD is valued a bit cheaper than 68.03% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 26.92, HD is valued at the same level.
With a Price/Forward Earnings ratio of 22.50, HD is valued on the expensive side.
HD's Price/Forward Earnings is on the same level as the industry average.
The average S&P500 Price/Forward Earnings ratio is at 23.57. HD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.27 | ||
| Fwd PE | 22.5 |
4.2 Price Multiples
HD's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than 68.03% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 24.95 | ||
| EV/EBITDA | 15.59 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)163.13
PEG (5Y)2.98
EPS Next 2Y1.98%
EPS Next 3Y4.25%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.67%.
Compared to an average industry Dividend Yield of 2.20, HD pays a better dividend. On top of this HD pays more dividend than 85.25% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, HD pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
The dividend of HD is nicely growing with an annual growth rate of 10.49%!
HD has paid a dividend for at least 10 years, which is 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)10.49%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
HD pays out 62.39% of its income as dividend. This is not a sustainable payout ratio.
The dividend of HD 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%
349.06
-0.23 (-0.07%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners74.02%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change-0.29%
Market Cap347.49B
Revenue(TTM)166.19B
Net Income(TTM)14.58B
Analysts76.6
Price Target406.19 (16.37%)
Short Float %1.03%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
Yearly Dividend8.99
Dividend Growth(5Y)10.49%
DP62.39%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.48%
Min EPS beat(2)-5.4%
Max EPS beat(2)-3.55%
EPS beat(4)0
Avg EPS beat(4)-3.84%
Min EPS beat(4)-5.4%
Max EPS beat(4)-2.55%
EPS beat(8)0
Avg EPS beat(8)-2.65%
EPS beat(12)1
Avg EPS beat(12)-2.15%
EPS beat(16)2
Avg EPS beat(16)-1.29%
Revenue beat(2)0
Avg Revenue beat(2)-2.7%
Min Revenue beat(2)-3.08%
Max Revenue beat(2)-2.32%
Revenue beat(4)0
Avg Revenue beat(4)-2.13%
Min Revenue beat(4)-3.08%
Max Revenue beat(4)-1.55%
Revenue beat(8)0
Avg Revenue beat(8)-2.24%
Revenue beat(12)0
Avg Revenue beat(12)-2.56%
Revenue beat(16)1
Avg Revenue beat(16)-1.93%
PT rev (1m)-7.05%
PT rev (3m)-7.66%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-13.2%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-3.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.27 | ||
| Fwd PE | 22.5 | ||
| P/S | 2.09 | ||
| P/FCF | 24.95 | ||
| P/OCF | 19.69 | ||
| P/B | 28.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.59 |
EPS(TTM)15
EY4.3%
EPS(NY)15.52
Fwd EY4.44%
FCF(TTM)13.99
FCFY4.01%
OCF(TTM)17.73
OCFY5.08%
SpS166.94
BVpS12.17
TBVpS-20.66
PEG (NY)163.13
PEG (5Y)2.98
Graham Number64.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.72% | ||
| ROE | 120.35% | ||
| ROCE | 29.95% | ||
| ROIC | 21.84% | ||
| ROICexc | 22.34% | ||
| ROICexgc | 40.25% | ||
| OM | 12.96% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.36% | ||
| FCFM | 8.38% |
ROA(3y)19.19%
ROA(5y)19.73%
ROE(3y)922.84%
ROE(5y)N/A
ROIC(3y)29.6%
ROIC(5y)32.3%
ROICexc(3y)31.18%
ROICexc(5y)34.99%
ROICexgc(3y)44.07%
ROICexgc(5y)47.45%
ROCE(3y)38.92%
ROCE(5y)42.7%
ROICexgc growth 3Y-8.8%
ROICexgc growth 5Y1.22%
ROICexc growth 3Y-16.36%
ROICexc growth 5Y-8.21%
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%
F-Score4
Asset Turnover1.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 91.88% | ||
| Cap/Sales | 2.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.98% | ||
| Profit Quality | 95.51% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | N/A |
F-Score4
WACC9.46%
ROIC/WACC2.31
Cap/Depr(3y)98.95%
Cap/Depr(5y)96.86%
Cap/Sales(3y)2.09%
Cap/Sales(5y)1.97%
Profit Quality(3y)98.66%
Profit Quality(5y)101.7%
High Growth Momentum
Growth
EPS 1Y (TTM)1.9%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%1.91%
EPS Next Y0.14%
EPS Next 2Y1.98%
EPS Next 3Y4.25%
EPS Next 5Y6.8%
Revenue 1Y (TTM)7.5%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%2.82%
Revenue Next Year3.59%
Revenue Next 2Y3.84%
Revenue Next 3Y4%
Revenue Next 5Y3.96%
EBIT growth 1Y1.71%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year13.92%
EBIT Next 3Y7.58%
EBIT Next 5Y5.74%
FCF growth 1Y-21.59%
FCF growth 3Y5.24%
FCF growth 5Y8.2%
OCF growth 1Y-16.09%
OCF growth 3Y6.13%
OCF growth 5Y7.68%
HOME DEPOT INC / HD FAQ
What is the ChartMill fundamental rating of HOME DEPOT INC (HD) stock?
ChartMill assigns a fundamental rating of 5 / 10 to HD.
What is the valuation status for HD stock?
ChartMill assigns a valuation rating of 4 / 10 to HOME DEPOT INC (HD). This can be considered as Fairly Valued.
How profitable is HOME DEPOT INC (HD) stock?
HOME DEPOT INC (HD) has a profitability rating of 8 / 10.
What is the valuation of HOME DEPOT INC based on its PE and PB ratios?
The Price/Earnings (PE) ratio for HOME DEPOT INC (HD) is 23.27 and the Price/Book (PB) ratio is 28.68.
Is the dividend of HOME DEPOT INC sustainable?
The dividend rating of HOME DEPOT INC (HD) is 6 / 10 and the dividend payout ratio is 62.39%.