HOME DEPOT INC (HD) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:HD - US4370761029 - Common Stock
345.82 USD
+1.72 (+0.5%)
345.612 USD
-0.21 (-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 scores excellent on profitability, but 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.
HD had a positive operating cash flow in the past year.
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
The Return On Assets of HD (13.72%) is better than 91.06% of its industry peers.
HD has a Return On Equity of 120.35%. This is amongst the best in the industry. HD outperforms 99.19% of its industry peers.
HD has a Return On Invested Capital of 21.84%. This is amongst the best in the industry. HD outperforms 88.62% 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 12.14%.
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
Looking at the Profit Margin, with a value of 8.77%, HD belongs to the top of the industry, outperforming 86.99% of the companies in the same industry.
HD's Profit Margin has declined in the last couple of years.
HD has a Operating Margin of 12.96%. This is amongst the best in the industry. HD outperforms 87.80% 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 on the low side compared to the rest of the industry. HD is outperformed by 60.16% 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
HD has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
Compared to 1 year ago, HD has more shares outstanding
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 69.92% of its industry peers.
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 78.86% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.09 | ||
| Debt/FCF | 4.02 | ||
| Altman-Z | N/A |
ROIC/WACC2.32
WACC9.4%
2.3 Liquidity
A Current Ratio of 1.05 indicates that HD should not have too much problems paying 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 71.54% 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's Quick ratio of 0.29 is on the low side compared to the rest of the industry. HD is outperformed by 76.42% of its industry peers.
| 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.
HD shows a small growth in Revenue. In the last year, the Revenue has grown by 7.50%.
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
Based on estimates for the next years, HD will show a small growth in Earnings Per Share. The EPS will grow by 6.80% on average per year.
The Revenue is expected to grow by 3.96% on average over the next years.
EPS Next Y0.14%
EPS Next 2Y1.98%
EPS Next 3Y4.25%
EPS Next 5Y6.8%
Revenue Next Year3.59%
Revenue Next 2Y3.84%
Revenue Next 3Y4%
Revenue Next 5Y3.96%
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
The Price/Earnings ratio is 23.05, which indicates a rather expensive current 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 68.29% of the companies listed in the same industry.
HD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 26.60, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 22.29, which indicates a rather expensive current valuation of HD.
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 23.23, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.05 | ||
| Fwd PE | 22.29 |
4.2 Price Multiples
HD's Enterprise Value to EBITDA ratio is in line with the industry average.
68.29% 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 | 24.72 | ||
| EV/EBITDA | 15.45 |
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)161.62
PEG (5Y)2.96
EPS Next 2Y1.98%
EPS Next 3Y4.25%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.67%. Purely for dividend investing, there may be better candidates out there.
HD's Dividend Yield is rather good when compared to the industry average which is at 2.20. HD pays more dividend than 85.37% of the companies in the same industry.
Compared to an average S&P500 Dividend Yield of 1.94, HD pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
5.2 History
On average, the dividend of HD grows each year by 10.49%, 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 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
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 2Y1.98%
EPS Next 3Y4.25%
345.82
+1.72 (+0.5%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners74.02%
Inst Owner Change0%
Ins Owners0.04%
Ins Owner Change-0.29%
Market Cap344.27B
Revenue(TTM)166.19B
Net Income(TTM)14.58B
Analysts76.6
Price Target406.19 (17.46%)
Short Float %1.03%
Short Ratio2.41
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.67% |
Yearly Dividend8.99
Dividend Growth(5Y)10.49%
DP62.39%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
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)-7.05%
PT rev (3m)-7.66%
EPS NQ rev (1m)-0.11%
EPS NQ rev (3m)-13.2%
EPS NY rev (1m)-0.04%
EPS NY rev (3m)-3.44%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0.31%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)0.37%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 23.05 | ||
| Fwd PE | 22.29 | ||
| P/S | 2.07 | ||
| P/FCF | 24.72 | ||
| P/OCF | 19.51 | ||
| P/B | 28.41 | ||
| P/tB | N/A | ||
| EV/EBITDA | 15.45 |
EPS(TTM)15
EY4.34%
EPS(NY)15.52
Fwd EY4.49%
FCF(TTM)13.99
FCFY4.05%
OCF(TTM)17.73
OCFY5.13%
SpS166.94
BVpS12.17
TBVpS-20.66
PEG (NY)161.62
PEG (5Y)2.96
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
WACC9.4%
ROIC/WACC2.32
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 Y0.14%
EPS Next 2Y1.98%
EPS Next 3Y4.25%
EPS Next 5Y6.8%
Revenue 1Y (TTM)7.5%
Revenue growth 3Y1.81%
Revenue growth 5Y7.67%
Sales Q2Q%2.82%
Revenue Next Year3.59%
Revenue Next 2Y3.84%
Revenue Next 3Y4%
Revenue Next 5Y3.96%
EBIT growth 1Y1.71%
EBIT growth 3Y-2.61%
EBIT growth 5Y6.32%
EBIT Next Year13.92%
EBIT Next 3Y7.58%
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 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 23.05 and the Price/Book (PB) ratio is 28.41.
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%.