HOME DEPOT INC (HD) Fundamental Analysis & Valuation
NYSE:HD • US4370761029
Current stock price
321.63 USD
-7.93 (-2.41%)
At close:
321.71 USD
+0.08 (+0.02%)
Pre-Market:
This HD fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
1. HD Profitability Analysis
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.
- In the past 5 years HD always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 13.47%, HD belongs to the top of the industry, outperforming 91.13% of the companies in the same industry.
- The Return On Equity of HD (110.48%) is better than 99.19% of its industry peers.
- HD's Return On Invested Capital of 20.64% is amongst the best of the industry. HD outperforms 89.52% of its industry peers.
- HD had an Average Return On Invested Capital over the past 3 years of 25.05%. This is significantly above the industry average of 13.35%.
- The 3 year average ROIC (25.05%) for HD is well above the current ROIC(20.64%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.47% | ||
| ROE | 110.48% | ||
| ROIC | 20.64% |
ROA(3y)16.22%
ROA(5y)18.78%
ROE(3y)594.65%
ROE(5y)N/A
ROIC(3y)25.05%
ROIC(5y)29.93%
1.3 Margins
- The Profit Margin of HD (8.60%) is better than 87.10% of its industry peers.
- HD's Profit Margin has declined in the last couple of years.
- Looking at the Operating Margin, with a value of 12.68%, HD belongs to the top of the industry, outperforming 89.52% of the companies in the same industry.
- HD's Operating Margin has declined in the last couple of years.
- HD has a Gross Margin (33.32%) 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 | 12.68% | ||
| PM (TTM) | 8.6% | ||
| GM | 33.32% |
OM growth 3Y-6%
OM growth 5Y-3.74%
PM growth 3Y-7.52%
PM growth 5Y-2.47%
GM growth 3Y-0.21%
GM growth 5Y-0.38%
2. HD Health Analysis
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 remains at a similar level compared to 1 year ago.
- HD has less shares outstanding than it did 5 years ago.
- HD has a better debt/assets ratio than last year.
2.2 Solvency
- The Debt to FCF ratio of HD is 4.41, which is a neutral value as it means it would take HD, 4.41 years of fcf income to pay off all of its debts.
- HD's Debt to FCF ratio of 4.41 is fine compared to the rest of the industry. HD outperforms 68.55% of its industry peers.
- A Debt/Equity ratio of 3.97 is on the high side and indicates that HD has dependencies on debt financing.
- HD's Debt to Equity ratio of 3.97 is on the low side compared to the rest of the industry. HD is outperformed by 75.00% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.97 | ||
| Debt/FCF | 4.41 | ||
| Altman-Z | N/A |
ROIC/WACC2.5
WACC8.24%
2.3 Liquidity
- HD has a Current Ratio of 1.06. This is a normal value and indicates that HD is financially healthy and should not expect problems in meeting its short term obligations.
- HD has a Current ratio of 1.06. This is in the lower half of the industry: HD underperforms 69.35% of its industry peers.
- HD has a Quick Ratio of 1.06. 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 worse Quick ratio (0.26) than 77.42% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.26 |
3. HD Growth Analysis
3.1 Past
- HD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -1.47%.
- The Earnings Per Share has been growing slightly by 4.26% on average over the past years.
- Looking at the last year, HD shows a small growth in Revenue. The Revenue has grown by 3.24% in the last year.
- HD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.51% yearly.
EPS 1Y (TTM)-1.47%
EPS 3Y-4.12%
EPS 5Y4.26%
EPS Q2Q%-9.93%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y1.52%
Revenue growth 5Y4.51%
Sales Q2Q%-3.79%
3.2 Future
- The Earnings Per Share is expected to grow by 7.18% on average over the next years.
- Based on estimates for the next years, HD will show a small growth in Revenue. The Revenue will grow by 3.81% on average per year.
EPS Next Y5.55%
EPS Next 2Y6.91%
EPS Next 3Y7.68%
EPS Next 5Y7.18%
Revenue Next Year3.95%
Revenue Next 2Y4.02%
Revenue Next 3Y4.17%
Revenue Next 5Y3.81%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. HD Valuation Analysis
4.1 Price/Earnings Ratio
- The Price/Earnings ratio is 21.88, which indicates a rather expensive current valuation of HD.
- 63.71% of the companies in the same industry are more expensive than HD, based on the Price/Earnings ratio.
- When comparing the Price/Earnings ratio of HD to the average of the S&P500 Index (26.17), we can say HD is valued inline with the index average.
- With a Price/Forward Earnings ratio of 20.73, HD is valued on the expensive side.
- HD's Price/Forward Earnings is on the same level as the industry average.
- Compared to an average S&P500 Price/Forward Earnings ratio of 23.05, HD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.88 | ||
| Fwd PE | 20.73 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as HD.
- Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than the industry average as 61.29% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.32 | ||
| EV/EBITDA | 14.8 |
4.3 Compensation for Growth
- The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
- The excellent profitability rating of HD may justify a higher PE ratio.
PEG (NY)3.94
PEG (5Y)5.13
EPS Next 2Y6.91%
EPS Next 3Y7.68%
5. HD Dividend Analysis
5.1 Amount
- HD has a Yearly Dividend Yield of 2.90%.
- HD's Dividend Yield is rather good when compared to the industry average which is at 3.06. HD pays more dividend than 83.87% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.89, HD pays a better dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
5.2 History
- On average, the dividend of HD grows each year by 8.96%, which is quite nice.
- 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)8.96%
Div Incr Years16
Div Non Decr Years34
5.3 Sustainability
- 64.65% of the earnings are spent on dividend by HD. 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.
DP64.65%
EPS Next 2Y6.91%
EPS Next 3Y7.68%
HD Fundamentals: All Metrics, Ratios and Statistics
321.63
-7.93 (-2.41%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)02-24 2026-02-24/bmo
Earnings (Next)05-18 2026-05-18
Inst Owners74.44%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change1.71%
Market Cap320.19B
Revenue(TTM)164.68B
Net Income(TTM)14.16B
Analysts76.09
Price Target416.63 (29.54%)
Short Float %1.03%
Short Ratio2.46
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.9% |
Yearly Dividend9.2
Dividend Growth(5Y)8.96%
DP64.65%
Div Incr Years16
Div Non Decr Years34
Ex-Date03-12 2026-03-12 (2.33)
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-0.72%
Min EPS beat(2)-5.4%
Max EPS beat(2)3.96%
EPS beat(4)1
Avg EPS beat(4)-2.22%
Min EPS beat(4)-5.4%
Max EPS beat(4)3.96%
EPS beat(8)1
Avg EPS beat(8)-2.03%
EPS beat(12)2
Avg EPS beat(12)-1.64%
EPS beat(16)3
Avg EPS beat(16)-0.92%
Revenue beat(2)0
Avg Revenue beat(2)-2.52%
Min Revenue beat(2)-2.71%
Max Revenue beat(2)-2.32%
Revenue beat(4)0
Avg Revenue beat(4)-2.42%
Min Revenue beat(4)-3.08%
Max Revenue beat(4)-1.56%
Revenue beat(8)0
Avg Revenue beat(8)-2.27%
Revenue beat(12)0
Avg Revenue beat(12)-2.51%
Revenue beat(16)1
Avg Revenue beat(16)-2.07%
PT rev (1m)2.22%
PT rev (3m)2.57%
EPS NQ rev (1m)-5.81%
EPS NQ rev (3m)-5.96%
EPS NY rev (1m)-0.1%
EPS NY rev (3m)0.01%
Revenue NQ rev (1m)-0.24%
Revenue NQ rev (3m)-0.31%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.88 | ||
| Fwd PE | 20.73 | ||
| P/S | 1.94 | ||
| P/FCF | 25.32 | ||
| P/OCF | 19.61 | ||
| P/B | 24.99 | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.8 |
EPS(TTM)14.7
EY4.57%
EPS(NY)15.52
Fwd EY4.82%
FCF(TTM)12.7
FCFY3.95%
OCF(TTM)16.4
OCFY5.1%
SpS165.43
BVpS12.87
TBVpS-19.95
PEG (NY)3.94
PEG (5Y)5.13
Graham Number65.25
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.47% | ||
| ROE | 110.48% | ||
| ROCE | 28.75% | ||
| ROIC | 20.64% | ||
| ROICexc | 21.01% | ||
| ROICexgc | 36.96% | ||
| OM | 12.68% | ||
| PM (TTM) | 8.6% | ||
| GM | 33.32% | ||
| FCFM | 7.68% |
ROA(3y)16.22%
ROA(5y)18.78%
ROE(3y)594.65%
ROE(5y)N/A
ROIC(3y)25.05%
ROIC(5y)29.93%
ROICexc(3y)26.13%
ROICexc(5y)31.4%
ROICexgc(3y)41.07%
ROICexgc(5y)45.33%
ROCE(3y)33.48%
ROCE(5y)39.89%
ROICexgc growth 3Y-7.04%
ROICexgc growth 5Y-4.98%
ROICexc growth 3Y-16.59%
ROICexc growth 5Y-11.68%
OM growth 3Y-6%
OM growth 5Y-3.74%
PM growth 3Y-7.52%
PM growth 5Y-2.47%
GM growth 3Y-0.21%
GM growth 5Y-0.38%
F-Score4
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.97 | ||
| Debt/FCF | 4.41 | ||
| Debt/EBITDA | 2.03 | ||
| Cap/Depr | 89.27% | ||
| Cap/Sales | 2.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.27% | ||
| Profit Quality | 89.33% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | N/A |
F-Score4
WACC8.24%
ROIC/WACC2.5
Cap/Depr(3y)93.76%
Cap/Depr(5y)95.16%
Cap/Sales(3y)2.18%
Cap/Sales(5y)2.04%
Profit Quality(3y)106.03%
Profit Quality(5y)94.11%
High Growth Momentum
Growth
EPS 1Y (TTM)-1.47%
EPS 3Y-4.12%
EPS 5Y4.26%
EPS Q2Q%-9.93%
EPS Next Y5.55%
EPS Next 2Y6.91%
EPS Next 3Y7.68%
EPS Next 5Y7.18%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y1.52%
Revenue growth 5Y4.51%
Sales Q2Q%-3.79%
Revenue Next Year3.95%
Revenue Next 2Y4.02%
Revenue Next 3Y4.17%
Revenue Next 5Y3.81%
EBIT growth 1Y-2.95%
EBIT growth 3Y-4.57%
EBIT growth 5Y0.6%
EBIT Next Year19.6%
EBIT Next 3Y10.35%
EBIT Next 5Y7.64%
FCF growth 1Y-22.54%
FCF growth 3Y3.23%
FCF growth 5Y-5.04%
OCF growth 1Y-17.59%
OCF growth 3Y3.76%
OCF growth 5Y-2.82%
HOME DEPOT INC / HD Fundamental Analysis FAQ
What is the ChartMill fundamental rating of HOME DEPOT INC (HD) stock?
ChartMill assigns a fundamental rating of 5 / 10 to HD.
Can you provide the valuation status for HOME DEPOT INC?
ChartMill assigns a valuation rating of 4 / 10 to HOME DEPOT INC (HD). This can be considered as Fairly Valued.
Can you provide the profitability details for HOME DEPOT INC?
HOME DEPOT INC (HD) has a profitability rating of 8 / 10.
What is the financial health of HOME DEPOT INC (HD) stock?
The financial health rating of HOME DEPOT INC (HD) is 3 / 10.
Is the dividend of HOME DEPOT INC sustainable?
The dividend rating of HOME DEPOT INC (HD) is 7 / 10 and the dividend payout ratio is 64.65%.