HOME DEPOT INC (HD) Stock Fundamental Analysis
NYSE:HD - US4370761029 - Common Stock
407.71 USD
+1.4 (+0.34%)
407.91 USD
+0.2 (+0.05%)
Overall HD gets a fundamental rating of 5 out of 10. We evaluated HD against 123 industry peers in the Specialty Retail industry. While HD has a great profitability rating, there are some minor concerns on its financial health. HD is not valued too expensively and it also shows a decent growth rate.
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
HD's Return On Assets of 14.62% is amongst the best of the industry. HD outperforms 89.43% of its industry peers.
HD has a better Return On Equity (137.17%) than 100.00% of its industry peers.
The Return On Invested Capital of HD (23.77%) is better than 91.06% 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 12.10%.
The 3 year average ROIC (29.60%) for HD is well above the current ROIC(23.77%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.62% | ||
| ROE | 137.17% | ||
| ROIC | 23.77% |
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
Looking at the Profit Margin, with a value of 8.86%, HD belongs to the top of the industry, outperforming 87.80% of the companies in the same industry.
In the last couple of years the Profit Margin of HD has declined.
HD has a better Operating Margin (13.09%) than 90.24% of its industry peers.
HD's Operating Margin has been stable in the last couple of years.
Looking at the Gross Margin, with a value of 33.35%, HD is in line with its industry, outperforming 41.46% of the companies in the same industry.
In the last couple of years the Gross Margin of HD has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.09% | ||
| PM (TTM) | 8.86% | ||
| GM | 33.35% |
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 about the same amount of shares outstanding.
The number of shares outstanding for HD has been reduced compared to 5 years ago.
HD has a better debt/assets ratio than last year.
2.2 Solvency
HD has a debt to FCF ratio of 3.68. This is a good value and a sign of high solvency as HD would need 3.68 years to pay back of all of its debts.
The Debt to FCF ratio of HD (3.68) is better than 71.54% of its industry peers.
HD has a Debt/Equity ratio of 4.31. This is a high value indicating a heavy dependency on external financing.
HD has a worse Debt to Equity ratio (4.31) than 79.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.31 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | N/A |
ROIC/WACC2.57
WACC9.25%
2.3 Liquidity
HD has a Current Ratio of 1.15. This is a normal value and indicates that HD is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of HD (1.15) is worse than 65.85% of its industry peers.
HD has a Quick Ratio of 1.15. This is a bad value and indicates that HD is not financially healthy enough and could expect problems in meeting its short term obligations.
The Quick ratio of HD (0.34) is worse than 66.67% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
HD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 0.47%.
The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
The Revenue has grown by 8.52% in the past year. This is quite good.
The Revenue has been growing slightly by 7.67% on average over the past years.
EPS 1Y (TTM)0.47%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%1.74%
Revenue 1Y (TTM)8.52%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%4.87%
3.2 Future
The Earnings Per Share is expected to grow by 7.42% 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 3.83% on average per year.
EPS Next Y3.59%
EPS Next 2Y6%
EPS Next 3Y6.99%
EPS Next 5Y7.42%
Revenue Next Year3.22%
Revenue Next 2Y3.79%
Revenue Next 3Y4.02%
Revenue Next 5Y3.83%
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
The Price/Earnings ratio is 27.31, which means the current valuation is very expensive for HD.
Based on the Price/Earnings ratio, HD is valued a bit cheaper than the industry average as 63.41% of the companies are valued more expensively.
HD's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 26.84.
With a Price/Forward Earnings ratio of 24.32, 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 22.48. HD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.31 | ||
| Fwd PE | 24.32 |
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.
Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than 65.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.52 | ||
| EV/EBITDA | 17.78 |
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)7.6
PEG (5Y)3.5
EPS Next 2Y6%
EPS Next 3Y6.99%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.26%.
HD's Dividend Yield is rather good when compared to the industry average which is at 5.42. HD pays more dividend than 82.93% of the companies in the same industry.
HD's Dividend Yield is comparable with the S&P500 average which is at 2.32.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
5.2 History
On average, the dividend of HD grows each year by 10.50%, which is quite nice.
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)10.5%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
61.82% 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.
DP61.82%
EPS Next 2Y6%
EPS Next 3Y6.99%
407.71
+1.4 (+0.34%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners72.71%
Inst Owner Change-0.21%
Ins Owners0.04%
Ins Owner Change0.75%
Market Cap405.83B
Analysts78.8
Price Target436.67 (7.1%)
Short Float %1.19%
Short Ratio3.27
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.26% |
Yearly Dividend8.99
Dividend Growth(5Y)10.5%
DP61.82%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-3.71%
Min EPS beat(2)-3.87%
Max EPS beat(2)-3.55%
EPS beat(4)0
Avg EPS beat(4)-3.02%
Min EPS beat(4)-3.87%
Max EPS beat(4)-2.12%
EPS beat(8)0
Avg EPS beat(8)-2.19%
EPS beat(12)1
Avg EPS beat(12)-1.71%
EPS beat(16)3
Avg EPS beat(16)-0.21%
Revenue beat(2)0
Avg Revenue beat(2)-2.32%
Min Revenue beat(2)-3.08%
Max Revenue beat(2)-1.56%
Revenue beat(4)0
Avg Revenue beat(4)-1.73%
Min Revenue beat(4)-3.08%
Max Revenue beat(4)-0.7%
Revenue beat(8)0
Avg Revenue beat(8)-2.28%
Revenue beat(12)0
Avg Revenue beat(12)-2.42%
Revenue beat(16)2
Avg Revenue beat(16)-1.66%
PT rev (1m)2.92%
PT rev (3m)1.27%
EPS NQ rev (1m)0.03%
EPS NQ rev (3m)0.52%
EPS NY rev (1m)-0.06%
EPS NY rev (3m)0.13%
Revenue NQ rev (1m)-0.36%
Revenue NQ rev (3m)-0.72%
Revenue NY rev (1m)-0.27%
Revenue NY rev (3m)-0.1%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.31 | ||
| Fwd PE | 24.32 | ||
| P/S | 2.46 | ||
| P/FCF | 28.52 | ||
| P/OCF | 22.71 | ||
| P/B | 38.05 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.78 |
EPS(TTM)14.93
EY3.66%
EPS(NY)16.76
Fwd EY4.11%
FCF(TTM)14.3
FCFY3.51%
OCF(TTM)17.95
OCFY4.4%
SpS165.82
BVpS10.71
TBVpS-17.81
PEG (NY)7.6
PEG (5Y)3.5
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 14.62% | ||
| ROE | 137.17% | ||
| ROCE | 31.21% | ||
| ROIC | 23.77% | ||
| ROICexc | 24.77% | ||
| ROICexgc | 43.28% | ||
| OM | 13.09% | ||
| PM (TTM) | 8.86% | ||
| GM | 33.35% | ||
| FCFM | 8.62% |
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-Score5
Asset Turnover1.65
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.31 | ||
| Debt/FCF | 3.68 | ||
| Debt/EBITDA | 1.79 | ||
| Cap/Depr | 91% | ||
| Cap/Sales | 2.21% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 69.8% | ||
| Profit Quality | 97.27% | ||
| Current Ratio | 1.15 | ||
| Quick Ratio | 0.34 | ||
| Altman-Z | N/A |
F-Score5
WACC9.25%
ROIC/WACC2.57
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)0.47%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%1.74%
EPS Next Y3.59%
EPS Next 2Y6%
EPS Next 3Y6.99%
EPS Next 5Y7.42%
Revenue 1Y (TTM)8.52%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%4.87%
Revenue Next Year3.22%
Revenue Next 2Y3.79%
Revenue Next 3Y4.02%
Revenue Next 5Y3.83%
EBIT growth 1Y2.07%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year15.93%
EBIT Next 3Y9.45%
EBIT Next 5Y6.31%
FCF growth 1Y-12.53%
FCF growth 3Y5.24%
FCF growth 5Y8.2%
OCF growth 1Y-8.99%
OCF growth 3Y6.13%
OCF growth 5Y7.68%