HOME DEPOT INC (HD) Stock Fundamental Analysis
USA - NYSE:HD - US4370761029 - Common Stock
388.89 USD
-3.01 (-0.77%)
389.33 USD
+0.44 (+0.11%)
Taking everything into account, HD scores 6 out of 10 in our fundamental rating. HD was compared to 119 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 not valued too expensively and it also shows a decent 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.
Each year in the past 5 years HD has been profitable.
HD had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 14.62%, HD belongs to the best of the industry, outperforming 89.08% of the companies in the same industry.
HD has a better Return On Equity (137.17%) than 100.00% of its industry peers.
HD's Return On Invested Capital of 23.77% is amongst the best of the industry. HD outperforms 90.76% 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 12.29%.
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
The Profit Margin of HD (8.86%) is better than 86.55% of its industry peers.
In the last couple of years the Profit Margin of HD has declined.
Looking at the Operating Margin, with a value of 13.09%, HD belongs to the top of the industry, outperforming 89.08% of the companies in the same industry.
In the last couple of years the Operating Margin of HD has remained more or less at the same level.
The Gross Margin of HD (33.35%) is comparable to the rest of the 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.
The number of shares outstanding for HD remains at a similar level compared to 1 year ago.
Compared to 5 years ago, HD has less shares outstanding
Compared to 1 year ago, HD has an improved debt to assets ratio.
2.2 Solvency
HD has an Altman-Z score of 6.34. This indicates that HD is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of HD (6.34) is better than 91.60% of its industry peers.
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's Debt to FCF ratio of 3.68 is fine compared to the rest of the industry. HD outperforms 69.75% 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 79.83% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.31 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | 6.34 |
ROIC/WACC2.56
WACC9.27%
2.3 Liquidity
A Current Ratio of 1.15 indicates that HD should not have too much problems paying its short term obligations.
With a Current ratio value of 1.15, HD is not doing good in the industry: 64.71% of the companies in the same industry are doing better.
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.
With a Quick ratio value of 0.34, HD is not doing good in the industry: 68.91% of the companies in the same industry are doing better.
| 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.
HD shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 7.80% yearly.
The Revenue has grown by 8.52% in the past year. This is quite good.
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
Based on estimates for the next years, HD will show a small growth in Earnings Per Share. The EPS will grow by 7.42% on average per year.
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 Y3.71%
EPS Next 2Y6.13%
EPS Next 3Y7.1%
EPS Next 5Y7.42%
Revenue Next Year3.29%
Revenue Next 2Y3.97%
Revenue Next 3Y4.12%
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.
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
Based on the Price/Earnings ratio of 26.05, the valuation of HD can be described as expensive.
Compared to the rest of the industry, the Price/Earnings ratio of HD indicates a somewhat cheap valuation: HD is cheaper than 65.55% 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 27.69.
With a Price/Forward Earnings ratio of 23.14, HD is valued on the expensive side.
HD's Price/Forward Earnings ratio is in line with the industry average.
When comparing the Price/Forward Earnings ratio of HD to the average of the S&P500 Index (23.18), we can say HD is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.05 | ||
| Fwd PE | 23.14 |
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 66.39% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 27.2 | ||
| EV/EBITDA | 17.17 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates HD does not grow enough to justify the current Price/Earnings ratio.
HD has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)7.01
PEG (5Y)3.34
EPS Next 2Y6.13%
EPS Next 3Y7.1%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.37%.
HD's Dividend Yield is rather good when compared to the industry average which is at 5.51. HD pays more dividend than 84.87% of the companies in the same industry.
HD's Dividend Yield is comparable with the S&P500 average which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
5.2 History
On average, the dividend of HD grows each year by 10.50%, which is quite nice.
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
HD pays out 61.82% 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.
DP61.82%
EPS Next 2Y6.13%
EPS Next 3Y7.1%
388.89
-3.01 (-0.77%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners73.35%
Inst Owner Change-2.58%
Ins Owners0.04%
Ins Owner Change-0.44%
Market Cap387.10B
Analysts77.92
Price Target440.99 (13.4%)
Short Float %1.34%
Short Ratio3.7
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.37% |
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)0.25%
PT rev (3m)4.05%
EPS NQ rev (1m)0.14%
EPS NQ rev (3m)0.24%
EPS NY rev (1m)0%
EPS NY rev (3m)0.06%
Revenue NQ rev (1m)0.06%
Revenue NQ rev (3m)-0.28%
Revenue NY rev (1m)0.07%
Revenue NY rev (3m)-0.21%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.05 | ||
| Fwd PE | 23.14 | ||
| P/S | 2.35 | ||
| P/FCF | 27.2 | ||
| P/OCF | 21.66 | ||
| P/B | 36.3 | ||
| P/tB | N/A | ||
| EV/EBITDA | 17.17 |
EPS(TTM)14.93
EY3.84%
EPS(NY)16.81
Fwd EY4.32%
FCF(TTM)14.3
FCFY3.68%
OCF(TTM)17.95
OCFY4.62%
SpS165.82
BVpS10.71
TBVpS-17.81
PEG (NY)7.01
PEG (5Y)3.34
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 | 6.34 |
F-Score5
WACC9.27%
ROIC/WACC2.56
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 3Y7.1%
EPS Next 5Y7.42%
Revenue 1Y (TTM)8.52%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%4.87%
Revenue Next Year3.29%
Revenue Next 2Y3.97%
Revenue Next 3Y4.12%
Revenue Next 5Y3.83%
EBIT growth 1Y2.07%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year15.96%
EBIT Next 3Y9.51%
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%