HOME DEPOT INC (HD) Stock Fundamental Analysis
USA • New York Stock Exchange • NYSE:HD • US4370761029
374.59 USD
+2.78 (+0.75%)
At close: Jan 30, 2026
374.59 USD
0 (0%)
After Hours: 1/30/2026, 8:04:00 PM
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 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.
- In the past year HD had a positive cash flow from operations.
- In the past 5 years HD has always been profitable.
- In the past 5 years HD always reported a positive cash flow from operatings.
1.2 Ratios
- HD's Return On Assets of 13.72% is amongst the best of the industry. HD outperforms 90.98% of its industry peers.
- HD's Return On Equity of 120.35% is amongst the best of the industry. HD outperforms 99.18% of its industry peers.
- The Return On Invested Capital of HD (21.84%) is better than 88.52% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HD is significantly above the industry average of 12.24%.
- The 3 year average ROIC (29.60%) for HD 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
- HD's Profit Margin of 8.77% is amongst the best of the industry. HD outperforms 86.89% of its industry peers.
- In the last couple of years the Profit Margin of HD has declined.
- The Operating Margin of HD (12.96%) is better than 87.70% 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's Gross Margin of 33.36% is in line compared to the rest of the industry. HD outperforms 40.16% of its industry peers.
- 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
- With a Return on Invested Capital (ROIC) well above the Cost of Capital (WACC), HD is creating value.
- Compared to 1 year ago, HD has more shares outstanding
- Compared to 5 years ago, HD has less shares outstanding
- The debt/assets ratio for HD has been reduced compared to a year ago.
2.2 Solvency
- HD has a debt to FCF ratio of 4.02. This is a neutral value as HD would need 4.02 years to pay back of all of its debts.
- Looking at the Debt to FCF ratio, with a value of 4.02, HD is in the better half of the industry, outperforming 69.67% of the companies in the same industry.
- HD has a Debt/Equity ratio of 4.09. This is a high value indicating a heavy dependency on external financing.
- The Debt to Equity ratio of HD (4.09) is worse than 78.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.32
WACC9.43%
2.3 Liquidity
- A Current Ratio of 1.05 indicates that HD should not have too much problems paying its short term obligations.
- HD has a worse Current ratio (1.05) than 71.31% of its industry peers.
- HD has a Quick Ratio of 1.05. 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 0.29, HD is not doing good in the industry: 75.41% of the companies in the same industry are doing better.
| 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.
- The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
- The Revenue has been growing slightly by 7.50% in the past year.
- 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 6.01% 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 3.78% 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
- A Price/Earnings ratio of 24.97 indicates a rather expensive valuation of HD.
- Compared to the rest of the industry, the Price/Earnings ratio of HD indicates a somewhat cheap valuation: HD is cheaper than 65.57% 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 28.30.
- With a Price/Forward Earnings ratio of 24.12, HD is valued on the expensive side.
- HD's Price/Forward Earnings ratio is in line with the industry average.
- HD is valuated at similar levels of the S&P average when we compare the Price/Forward Earnings ratio to 25.57, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 24.97 | ||
| Fwd PE | 24.12 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as HD.
- HD's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. HD is cheaper than 63.93% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 26.78 | ||
| EV/EBITDA | 16.46 |
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)173.89
PEG (5Y)3.2
EPS Next 2Y2.03%
EPS Next 3Y4.29%
5. Dividend
5.1 Amount
- HD has a Yearly Dividend Yield of 2.41%.
- HD's Dividend Yield is rather good when compared to the industry average which is at 2.15. HD pays more dividend than 81.97% of the companies in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, HD pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.41% |
5.2 History
- The dividend of HD is nicely growing with an annual growth rate of 10.49%!
- HD has been paying a dividend for at least 10 years, so it has 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
- 62.39% 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.
DP62.39%
EPS Next 2Y2.03%
EPS Next 3Y4.29%
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 24.97 and the Price/Book (PB) ratio is 30.78.
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%.