HOME DEPOT INC (HD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HD - US4370761029 - Common Stock
357.33 USD
+0.41 (+0.11%)
357.4 USD
+0.07 (+0.02%)
Overall HD gets a fundamental rating of 5 out of 10. We evaluated HD against 122 industry peers in the Specialty Retail industry. While HD belongs to the best of the industry regarding profitability, there are concerns on its financial health. HD has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
HD had positive earnings in the past year.
In the past year HD had a positive cash flow from operations.
In the past 5 years HD has always been profitable.
HD had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 13.72%, HD belongs to the top of the industry, outperforming 90.16% of the companies in the same industry.
With an excellent Return On Equity value of 120.35%, HD belongs to the best of the industry, outperforming 100.00% of the companies in the same industry.
HD has a Return On Invested Capital of 21.84%. This is amongst the best in the industry. HD outperforms 90.16% of its industry peers.
HD had an Average Return On Invested Capital over the past 3 years of 29.60%. This is significantly above the industry average of 11.71%.
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 has a Profit Margin of 8.77%. This is amongst the best in 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 better Operating Margin (12.96%) than 87.70% 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 33.36%, HD is in line with its industry, outperforming 42.62% of the companies in the same industry.
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
HD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
HD has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, HD has less shares outstanding
HD has a better debt/assets ratio than last year.
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.
HD's Debt to FCF ratio of 4.02 is fine compared to the rest of the industry. HD outperforms 70.49% of its industry peers.
A Debt/Equity ratio of 4.09 is on the high side and indicates that HD has dependencies on debt financing.
HD has a Debt to Equity ratio of 4.09. This is in the lower half of the industry: HD underperforms 78.69% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.42
WACC9.03%
2.3 Liquidity
HD has a Current Ratio of 1.05. This is a normal value and indicates that HD is financially healthy and should not expect problems in meeting its short term obligations.
HD's Current ratio of 1.05 is on the low side compared to the rest of the industry. HD is outperformed by 69.67% 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.
HD has a Quick ratio of 0.29. This is in the lower half of the industry: HD underperforms 77.87% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.29 |
3. Growth
3.1 Past
HD shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 1.90%.
The Earnings Per Share has been growing slightly by 7.80% on average over the past years.
Looking at the last year, HD shows a small growth in Revenue. The Revenue has grown by 7.50% in the last year.
HD shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 7.67% yearly.
EPS 1Y (TTM)1.9%
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
HD is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 6.80% yearly.
HD is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 3.96% yearly.
EPS Next Y3.59%
EPS Next 2Y6%
EPS Next 3Y5.33%
EPS Next 5Y6.8%
Revenue Next Year3.29%
Revenue Next 2Y3.97%
Revenue Next 3Y4.16%
Revenue Next 5Y3.96%
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.
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
The Price/Earnings ratio is 23.82, which indicates a rather expensive current valuation of HD.
HD's Price/Earnings ratio is a bit cheaper when compared to the industry. HD is cheaper than 67.21% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.11. HD is around the same levels.
The Price/Forward Earnings ratio is 21.31, which indicates a rather expensive current valuation of HD.
The rest of the industry has a similar Price/Forward Earnings ratio as HD.
HD's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 36.21.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.82 | ||
| Fwd PE | 21.31 |
4.2 Price Multiples
HD's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than the industry average as 68.85% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 25.54 | ||
| EV/EBITDA | 15.9 |
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)6.63
PEG (5Y)3.06
EPS Next 2Y6%
EPS Next 3Y5.33%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.59%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 5.64, HD pays a better dividend. On top of this HD pays more dividend than 88.52% of the companies listed 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 | 2.59% |
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 their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)10.49%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
HD pays out 62.39% of its income as dividend. 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 2Y6%
EPS Next 3Y5.33%
357.33
+0.41 (+0.11%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners73.35%
Inst Owner Change-3.45%
Ins Owners0.04%
Ins Owner Change-0.16%
Market Cap355.68B
Revenue(TTM)166.19B
Net Income(TTM)14.58B
Analysts77.92
Price Target436.99 (22.29%)
Short Float %1.02%
Short Ratio2.84
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.59% |
Yearly Dividend8.99
Dividend Growth(5Y)10.49%
DP62.39%
Div Incr Years15
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)0
Avg EPS beat(2)-4.48%
Min EPS beat(2)-5.4%
Max EPS beat(2)-3.55%
EPS beat(4)0
Avg EPS beat(4)-3.84%
Min EPS beat(4)-5.4%
Max EPS beat(4)-2.55%
EPS beat(8)0
Avg EPS beat(8)-2.65%
EPS beat(12)1
Avg EPS beat(12)-2.15%
EPS beat(16)2
Avg EPS beat(16)-1.29%
Revenue beat(2)0
Avg Revenue beat(2)-2.7%
Min Revenue beat(2)-3.08%
Max Revenue beat(2)-2.32%
Revenue beat(4)0
Avg Revenue beat(4)-2.13%
Min Revenue beat(4)-3.08%
Max Revenue beat(4)-1.55%
Revenue beat(8)0
Avg Revenue beat(8)-2.24%
Revenue beat(12)0
Avg Revenue beat(12)-2.56%
Revenue beat(16)1
Avg Revenue beat(16)-1.93%
PT rev (1m)-0.91%
PT rev (3m)0.07%
EPS NQ rev (1m)-10.95%
EPS NQ rev (3m)-9.98%
EPS NY rev (1m)0%
EPS NY rev (3m)0%
Revenue NQ rev (1m)0.29%
Revenue NQ rev (3m)0.29%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.07%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.82 | ||
| Fwd PE | 21.31 | ||
| P/S | 2.14 | ||
| P/FCF | 25.54 | ||
| P/OCF | 20.15 | ||
| P/B | 29.36 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.9 |
EPS(TTM)15
EY4.2%
EPS(NY)16.76
Fwd EY4.69%
FCF(TTM)13.99
FCFY3.92%
OCF(TTM)17.73
OCFY4.96%
SpS166.96
BVpS12.17
TBVpS-20.66
PEG (NY)6.63
PEG (5Y)3.06
Graham Number64.09
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.72% | ||
| ROE | 120.35% | ||
| ROCE | 29.95% | ||
| ROIC | 21.84% | ||
| ROICexc | 22.34% | ||
| ROICexgc | 40.25% | ||
| OM | 12.96% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.36% | ||
| FCFM | 8.38% |
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%
ROICexgc growth 3Y-8.8%
ROICexgc 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-Score4
Asset Turnover1.56
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Debt/EBITDA | 1.94 | ||
| Cap/Depr | 91.88% | ||
| Cap/Sales | 2.24% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 68.98% | ||
| Profit Quality | 95.51% | ||
| Current Ratio | 1.05 | ||
| Quick Ratio | 0.29 | ||
| Altman-Z | N/A |
F-Score4
WACC9.03%
ROIC/WACC2.42
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)1.9%
EPS 3Y-1.31%
EPS 5Y7.8%
EPS Q2Q%1.91%
EPS Next Y3.59%
EPS Next 2Y6%
EPS Next 3Y5.33%
EPS Next 5Y6.8%
Revenue 1Y (TTM)7.5%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%2.82%
Revenue Next Year3.29%
Revenue Next 2Y3.97%
Revenue Next 3Y4.16%
Revenue Next 5Y3.96%
EBIT growth 1Y1.71%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year15.96%
EBIT Next 3Y8.38%
EBIT Next 5Y5.74%
FCF growth 1Y-21.59%
FCF growth 3Y5.24%
FCF growth 5Y8.2%
OCF growth 1Y-16.09%
OCF growth 3Y6.13%
OCF growth 5Y7.68%
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 of HOME DEPOT INC (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.
Can you provide the PE and PB ratios for HD stock?
The Price/Earnings (PE) ratio for HOME DEPOT INC (HD) is 23.82 and the Price/Book (PB) ratio is 29.36.
Can you provide the financial health for HD stock?
The financial health rating of HOME DEPOT INC (HD) is 3 / 10.