HOME DEPOT INC (HD) Stock Fundamental Analysis
USA - NYSE:HD - US4370761029 - Common Stock
410.09 USD
+2.64 (+0.65%)
410.35 USD
+0.26 (+0.06%)
Overall HD gets a fundamental rating of 5 out of 10. We evaluated HD against 122 industry peers in the Specialty Retail industry. HD has an excellent profitability rating, but there are some minor concerns on its financial health. HD has a correct valuation and a medium growth rate.
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.
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 has a better Return On Assets (14.62%) than 89.34% of its industry peers.
HD has a better Return On Equity (137.17%) than 100.00% of its industry peers.
HD has a Return On Invested Capital of 23.77%. This is amongst the best in the industry. HD outperforms 90.98% of its industry peers.
The Average Return On Invested Capital over the past 3 years for HD is significantly above the industry average of 12.02%.
The last Return On Invested Capital (23.77%) for HD is well below the 3 year average (29.60%), which needs to be investigated, but indicates that HD had better years and this may not be a problem.
| 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
HD's Profit Margin of 8.86% is amongst the best of the industry. HD outperforms 86.89% of its industry peers.
HD's Profit Margin has declined in the last couple of years.
HD has a Operating Margin of 13.09%. This is amongst the best in the industry. HD outperforms 90.16% of its industry peers.
In the last couple of years the Operating Margin of HD has remained more or less at the same level.
Looking at the Gross Margin, with a value of 33.35%, HD is in line with its industry, outperforming 40.16% 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.
HD has about the same amout of shares outstanding than it did 1 year ago.
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
The Debt to FCF ratio of HD is 3.68, which is a good value as it means it would take HD, 3.68 years of fcf income to pay off all of its debts.
HD has a better Debt to FCF ratio (3.68) than 70.49% of its industry peers.
A Debt/Equity ratio of 4.31 is on the high side and indicates that HD has dependencies on debt financing.
HD has a Debt to Equity ratio of 4.31. This is amonst the worse of the industry: HD underperforms 80.33% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.31 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | N/A |
ROIC/WACC2.51
WACC9.46%
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.
HD has a worse Current ratio (1.15) than 65.57% of its industry peers.
A Quick Ratio of 0.34 indicates that HD may have some problems paying its short term obligations.
HD has a worse Quick ratio (0.34) than 68.03% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.15 | ||
| Quick Ratio | 0.34 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 0.47% over the past year.
The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
HD shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 8.52%.
Measured over the past years, HD shows a small growth in Revenue. The Revenue has been growing by 7.67% on average per year.
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.
HD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.83% yearly.
EPS Next Y3.71%
EPS Next 2Y6.13%
EPS Next 3Y7.05%
EPS Next 5Y7.42%
Revenue Next Year3.21%
Revenue Next 2Y3.91%
Revenue Next 3Y4.01%
Revenue Next 5Y3.83%
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.
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
Based on the Price/Earnings ratio of 27.47, the valuation of HD can be described as expensive.
Based on the Price/Earnings ratio, HD is valued a bit cheaper than 63.11% of the companies in the same industry.
HD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.32, which is the current average of the S&P500 Index.
HD is valuated rather expensively with a Price/Forward Earnings ratio of 24.40.
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 22.89, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 24.4 |
4.2 Price Multiples
The rest of the industry has a similar Enterprise Value to EBITDA ratio as HD.
65.57% of the companies in the same industry are more expensive than HD, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.69 | ||
| EV/EBITDA | 17.77 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
HD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)7.39
PEG (5Y)3.52
EPS Next 2Y6.13%
EPS Next 3Y7.05%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.20%, HD has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.22, HD pays a better dividend. On top of this HD pays more dividend than 83.61% of the companies listed in the same industry.
HD's Dividend Yield is comparable with the S&P500 average which is at 2.38.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
5.2 History
The dividend of HD is nicely growing with an annual growth rate of 10.50%!
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.
HD's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP61.82%
EPS Next 2Y6.13%
EPS Next 3Y7.05%
410.09
+2.64 (+0.65%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners73.35%
Inst Owner Change-0.2%
Ins Owners0.04%
Ins Owner Change0.87%
Market Cap408.20B
Analysts77.92
Price Target439.88 (7.26%)
Short Float %1.05%
Short Ratio2.93
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
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)3.68%
PT rev (3m)3.68%
EPS NQ rev (1m)0.15%
EPS NQ rev (3m)-0.04%
EPS NY rev (1m)0.12%
EPS NY rev (3m)0.25%
Revenue NQ rev (1m)-0.32%
Revenue NQ rev (3m)-0.51%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-0.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.47 | ||
| Fwd PE | 24.4 | ||
| P/S | 2.47 | ||
| P/FCF | 28.69 | ||
| P/OCF | 22.84 | ||
| P/B | 38.27 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.77 |
EPS(TTM)14.93
EY3.64%
EPS(NY)16.81
Fwd EY4.1%
FCF(TTM)14.3
FCFY3.49%
OCF(TTM)17.95
OCFY4.38%
SpS165.82
BVpS10.71
TBVpS-17.81
PEG (NY)7.39
PEG (5Y)3.52
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
WACC9.46%
ROIC/WACC2.51
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 Y3.71%
EPS Next 2Y6.13%
EPS Next 3Y7.05%
EPS Next 5Y7.42%
Revenue 1Y (TTM)8.52%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%4.87%
Revenue Next Year3.21%
Revenue Next 2Y3.91%
Revenue Next 3Y4.01%
Revenue Next 5Y3.83%
EBIT growth 1Y2.07%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year15.96%
EBIT Next 3Y9.16%
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%