HOME DEPOT INC (HD) Stock Fundamental Analysis
NYSE:HD - New York Stock Exchange, Inc. - US4370761029 - Common Stock - Currency: USD
Overall HD gets a fundamental rating of 5 out of 10. We evaluated HD against 121 industry peers in the Specialty Retail industry. HD has an excellent profitability rating, but there are some minor concerns on its financial health. HD is valued expensive and it does not seem to be growing.
1. Profitability
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.
Each year in the past 5 years HD had a positive operating cash flow.
1.2 Ratios
The Return On Assets of HD (15.40%) is better than 90.91% of its industry peers.
With an excellent Return On Equity value of 222.98%, HD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
Looking at the Return On Invested Capital, with a value of 24.19%, HD belongs to the top of the industry, outperforming 90.91% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for HD is significantly above the industry average of 13.08%.
The 3 year average ROIC (29.60%) for HD is well above the current ROIC(24.19%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.4% | ||
| ROE | 222.98% | ||
| ROIC | 24.19% |
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 has a Profit Margin of 9.28%. This is amongst the best in the industry. HD outperforms 88.43% of its industry peers.
In the last couple of years the Profit Margin of HD has declined.
The Operating Margin of HD (13.49%) is better than 90.91% 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 Gross Margin (33.42%) 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 | 13.49% | ||
| PM (TTM) | 9.28% | ||
| GM | 33.42% |
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
HD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HD has about the same amount of shares outstanding.
HD has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, HD has an improved debt to assets ratio.
2.2 Solvency
HD has a debt to FCF ratio of 3.27. This is a good value and a sign of high solvency as HD would need 3.27 years to pay back of all of its debts.
HD's Debt to FCF ratio of 3.27 is fine compared to the rest of the industry. HD outperforms 68.59% of its industry peers.
HD has a Debt/Equity ratio of 7.35. This is a high value indicating a heavy dependency on external financing.
HD has a worse Debt to Equity ratio (7.35) than 80.17% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.35 | ||
| Debt/FCF | 3.27 | ||
| Altman-Z | N/A |
ROIC/WACC2.71
WACC8.92%
2.3 Liquidity
HD has a Current Ratio of 1.11. 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 1.11, HD is doing worse than 68.59% 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 76.86% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
The earnings per share for HD have decreased by -1.19% in the last year.
Measured over the past 5 years, HD shows a small growth in Earnings Per Share. The EPS has been growing by 7.80% on average per year.
HD shows a small growth in Revenue. In the last year, the Revenue has grown by 4.48%.
HD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.67% yearly.
EPS 1Y (TTM)-1.19%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%7.09%
Revenue 1Y (TTM)4.48%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%14.14%
3.2 Future
The Earnings Per Share is expected to grow by 8.78% on average over the next years. This is quite good.
HD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.86% yearly.
EPS Next Y3.84%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y8.78%
Revenue Next Year3.61%
Revenue Next 2Y3.86%
Revenue Next 3Y3.95%
Revenue Next 5Y3.86%
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
The Price/Earnings ratio is 24.46, which indicates a rather expensive current valuation of HD.
Compared to the rest of the industry, the Price/Earnings ratio of HD is on the same level as its industry peers.
Compared to an average S&P500 Price/Earnings ratio of 27.75, HD is valued at the same level.
Based on the Price/Forward Earnings ratio of 23.55, the valuation of HD can be described as rather expensive.
HD's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.49, HD is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.46 | ||
| Fwd PE | 23.55 |
4.2 Price Multiples
Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of HD is on the same level as its industry peers.
HD's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HD is cheaper than 64.46% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 22.21 | ||
| EV/EBITDA | 16.12 |
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)6.37
PEG (5Y)3.14
EPS Next 2Y6.71%
EPS Next 3Y7.35%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.56%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.39, HD pays a better dividend. On top of this HD pays more dividend than 81.82% of the companies listed in the same industry.
HD's Dividend Yield is comparable with the S&P500 average which is at 2.44.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
5.2 History
The dividend of HD is nicely growing with an annual growth rate of 10.50%!
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)10.5%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
60.31% of the earnings are spent on dividend by HD. This is not a sustainable payout ratio.
HD's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP60.31%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
NYSE:HD (5/2/2025, 3:39:53 PM)
364.87
+6.57 (+1.83%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners72.73%
Inst Owner Change4.2%
Ins Owners0.04%
Ins Owner Change1.17%
Market Cap362.66B
Analysts78.8
Price Target432.84 (18.63%)
Short Float %1.02%
Short Ratio2.49
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.56% |
Yearly Dividend8.99
Dividend Growth(5Y)10.5%
DP60.31%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-2.33%
Min EPS beat(2)-2.55%
Max EPS beat(2)-2.12%
EPS beat(4)0
Avg EPS beat(4)-1.84%
Min EPS beat(4)-2.55%
Max EPS beat(4)-0.62%
EPS beat(8)1
Avg EPS beat(8)-1.35%
EPS beat(12)2
Avg EPS beat(12)-0.49%
EPS beat(16)4
Avg EPS beat(16)1.55%
Revenue beat(2)0
Avg Revenue beat(2)-1.13%
Min Revenue beat(2)-1.55%
Max Revenue beat(2)-0.7%
Revenue beat(4)0
Avg Revenue beat(4)-2.12%
Min Revenue beat(4)-3.55%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-2.56%
Revenue beat(12)1
Avg Revenue beat(12)-1.95%
Revenue beat(16)3
Avg Revenue beat(16)-1.24%
PT rev (1m)-2.18%
PT rev (3m)-2.77%
EPS NQ rev (1m)-0.08%
EPS NQ rev (3m)-1.36%
EPS NY rev (1m)-0.17%
EPS NY rev (3m)-3.47%
Revenue NQ rev (1m)-0.03%
Revenue NQ rev (3m)0.48%
Revenue NY rev (1m)0.18%
Revenue NY rev (3m)0.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.46 | ||
| Fwd PE | 23.55 | ||
| P/S | 2.27 | ||
| P/FCF | 22.21 | ||
| P/OCF | 18.31 | ||
| P/B | 54.62 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.12 |
EPS(TTM)14.92
EY4.09%
EPS(NY)15.49
Fwd EY4.25%
FCF(TTM)16.42
FCFY4.5%
OCF(TTM)19.93
OCFY5.46%
SpS160.49
BVpS6.68
TBVpS-21.95
PEG (NY)6.37
PEG (5Y)3.14
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.4% | ||
| ROE | 222.98% | ||
| ROCE | 31.91% | ||
| ROIC | 24.19% | ||
| ROICexc | 24.79% | ||
| ROICexgc | 43.53% | ||
| OM | 13.49% | ||
| PM (TTM) | 9.28% | ||
| GM | 33.42% | ||
| FCFM | 10.23% |
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%
ROICexcg growth 3Y-8.8%
ROICexcg 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-Score6
Asset Turnover1.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 7.35 | ||
| Debt/FCF | 3.27 | ||
| Debt/EBITDA | 1.93 | ||
| Cap/Depr | 92.66% | ||
| Cap/Sales | 2.18% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.34% | ||
| Profit Quality | 110.26% | ||
| Current Ratio | 1.11 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | N/A |
F-Score6
WACC8.92%
ROIC/WACC2.71
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)-1.19%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%7.09%
EPS Next Y3.84%
EPS Next 2Y6.71%
EPS Next 3Y7.35%
EPS Next 5Y8.78%
Revenue 1Y (TTM)4.48%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%14.14%
Revenue Next Year3.61%
Revenue Next 2Y3.86%
Revenue Next 3Y3.95%
Revenue Next 5Y3.86%
EBIT growth 1Y-0.75%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year16.46%
EBIT Next 3Y9.88%
EBIT Next 5Y6.61%
FCF growth 1Y-9.03%
FCF growth 3Y5.24%
FCF growth 5Y8.2%
OCF growth 1Y-6.43%
OCF growth 3Y6.13%
OCF growth 5Y7.68%