HOME DEPOT INC (HD)
US4370761029 - Common Stock
HD gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 126 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. HD has a valuation in line with the averages, 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.
HD had positive earnings in each of the past 5 years.
Each year in the past 5 years HD had a positive operating cash flow.
1.2 Ratios
HD's Return On Assets of 19.79% is amongst the best of the industry. HD outperforms 96.03% of its industry peers.
HD has a better Return On Equity (1450.48%) than 99.21% of its industry peers.
HD has a Return On Invested Capital of 30.26%. This is amongst the best in the industry. HD outperforms 94.44% 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 13.85%.
The 3 year average ROIC (34.87%) for HD is well above the current ROIC(30.26%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.79% | ||
| ROE | 1450.48% | ||
| ROIC | 30.26% |
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
The Profit Margin of HD (9.92%) is better than 92.06% of its industry peers.
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 14.21% is amongst the best of the industry. HD outperforms 92.06% of its industry peers.
In the last couple of years the Operating Margin of HD has remained more or less at the same level.
HD has a worse Gross Margin (33.38%) than 60.32% of its industry peers.
HD's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.21% | ||
| PM (TTM) | 9.92% | ||
| GM | 33.38% |
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
The debt/assets ratio for HD is higher compared to a year ago.
2.2 Solvency
An Altman-Z score of 7.20 indicates that HD is not in any danger for bankruptcy at the moment.
The Altman-Z score of HD (7.20) is better than 96.83% of its industry peers.
HD has a debt to FCF ratio of 2.46. This is a good value and a sign of high solvency as HD would need 2.46 years to pay back of all of its debts.
Looking at the Debt to FCF ratio, with a value of 2.46, HD is in the better half of the industry, outperforming 68.25% of the companies in the same industry.
A Debt/Equity ratio of 40.94 is on the high side and indicates that HD has dependencies on debt financing.
HD has a Debt to Equity ratio of 40.94. This is amonst the worse of the industry: HD underperforms 84.92% of its industry peers.
Although HD does not score too well on debt/equity it has very limited outstanding debt, which is well covered by the FCF. We will not put too much weight on the debt/equity number as it may be because of low equity, which could be a consequence of a share buyback program for instance. This needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 40.94 | ||
| Debt/FCF | 2.46 | ||
| Altman-Z | 7.2 |
ROIC/WACC3.42
WACC8.86%
2.3 Liquidity
A Current Ratio of 1.35 indicates that HD should not have too much problems paying its short term obligations.
HD has a Current ratio (1.35) which is in line with its industry peers.
HD has a Quick Ratio of 1.35. This is a bad value and indicates that HD is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.40, HD is not doing good in the industry: 66.67% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.4 |
3. Growth
3.1 Past
HD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -9.47%.
HD shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 8.83% yearly.
The Revenue has decreased by -3.01% 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)-9.47%
EPS 3Y8.17%
EPS 5Y8.83%
EPS growth Q2Q-14.55%
Revenue 1Y (TTM)-3.01%
Revenue growth 3Y4.94%
Revenue growth 5Y7.13%
Revenue growth Q2Q-2.92%
3.2 Future
HD is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.64% yearly.
HD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.96% yearly.
EPS Next Y4.76%
EPS Next 2Y6%
EPS Next 3Y6.93%
EPS Next 5Y7.64%
Revenue Next Year1.23%
Revenue Next 2Y2.01%
Revenue Next 3Y2.68%
Revenue Next 5Y2.96%
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
HD is valuated rather expensively with a Price/Earnings ratio of 22.19.
Compared to the rest of the industry, the Price/Earnings ratio of HD indicates a somewhat cheap valuation: HD is cheaper than 61.11% of the companies listed in the same industry.
HD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 24.92.
HD is valuated rather expensively with a Price/Forward Earnings ratio of 21.18.
Compared to the rest of the industry, the Price/Forward Earnings ratio of HD is on the same level as its industry peers.
HD is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 21.49, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.19 | ||
| Fwd PE | 21.18 |
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 64.29% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.5 | ||
| EV/EBITDA | 14.81 |
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)4.66
PEG (5Y)2.51
EPS Next 2Y6%
EPS Next 3Y6.93%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.71%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.46, HD pays a better dividend. On top of this HD pays more dividend than 87.30% of the companies listed in the same industry.
HD's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
5.2 History
The dividend of HD is nicely growing with an annual growth rate of 14.97%!
HD has paid a dividend for at least 10 years, which is a reliable track record.
HD has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)14.97%
Div Incr Years14
Div Non Decr Years19
5.3 Sustainability
HD pays out 55.36% of its income as dividend. This is a bit on the high side, but may be sustainable.
The dividend of HD is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP55.36%
EPS Next 2Y6%
EPS Next 3Y6.93%
HOME DEPOT INC
NYSE:HD (4/26/2024, 7:04:00 PM)
After market: 335.09 0 (0%)335.09
+3.11 (+0.94%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap332.08B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.71% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
Max EPS beat(4)
EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
Avg Revenue beat(4)
Min Revenue beat(4)
Max Revenue beat(4)
Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.19 | ||
| Fwd PE | 21.18 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)4.66
PEG (5Y)2.51
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 19.79% | ||
| ROE | 1450.48% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.21% | ||
| PM (TTM) | 9.92% | ||
| GM | 33.38% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover1.99
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 40.94 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.35 | ||
| Quick Ratio | 0.4 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-9.47%
EPS 3Y8.17%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.76%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-3.01%
Revenue growth 3Y4.94%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y