HOME DEPOT INC (HD) Stock Fundamental Analysis
USA - NYSE:HD - US4370761029 - Common Stock
415.69 USD
-1.79 (-0.43%)
416 USD
+0.31 (+0.07%)
We assign a fundamental rating of 5 out of 10 to HD. HD was compared to 122 industry peers in the Specialty Retail industry. While HD belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. HD has a decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year HD was profitable.
HD had a positive operating cash flow in the past year.
Each year in the past 5 years HD has been profitable.
In the past 5 years HD always reported a positive cash flow from operatings.
1.2 Ratios
HD has a Return On Assets of 14.62%. This is amongst the best in the industry. HD outperforms 89.34% of its industry peers.
HD has a better Return On Equity (137.17%) than 100.00% of its industry peers.
Looking at the Return On Invested Capital, with a value of 23.77%, HD belongs to the top of the industry, outperforming 90.98% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital 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
The Profit Margin of HD (8.86%) is better than 86.89% of its industry peers.
HD's Profit Margin has declined in the last couple of years.
HD has a better Operating Margin (13.09%) than 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.
HD has a Gross Margin of 33.35%. This is comparable to the rest of the industry: HD outperforms 40.16% of its industry peers.
HD's Gross Margin has been stable in the last couple of years.
| 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.
HD has a better debt/assets ratio than last year.
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's Debt to FCF ratio of 3.68 is fine compared to the rest of the industry. HD outperforms 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.
With a Debt to Equity ratio value of 4.31, HD is not doing good in the industry: 80.33% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 4.31 | ||
| Debt/FCF | 3.68 | ||
| Altman-Z | N/A |
ROIC/WACC2.52
WACC9.44%
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 65.57% 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.
Measured over the past 5 years, HD shows a small growth in Earnings Per Share. The EPS has been growing by 7.80% on average per year.
Looking at the last year, HD shows a quite strong growth in Revenue. The Revenue has grown by 8.52% in the last year.
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.
The Revenue is expected to grow by 3.83% on average over the next years.
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.
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
With a Price/Earnings ratio of 27.84, HD can be considered very expensive at the moment.
62.30% of the companies in the same industry are more expensive than HD, based on the Price/Earnings ratio.
HD is valuated at similar levels of the S&P average when we compare the Price/Earnings ratio to 27.38, which is the current average of the S&P500 Index.
The Price/Forward Earnings ratio is 24.74, which indicates a rather expensive current valuation of HD.
The rest of the industry has a similar Price/Forward Earnings ratio as HD.
The average S&P500 Price/Forward Earnings ratio is at 22.86. HD is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 27.84 | ||
| Fwd PE | 24.74 |
4.2 Price Multiples
HD's Enterprise Value to EBITDA is on the same level as the industry average.
64.75% 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 | 29.08 | ||
| EV/EBITDA | 18.1 |
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)7.49
PEG (5Y)3.57
EPS Next 2Y6.13%
EPS Next 3Y7.05%
5. Dividend
5.1 Amount
HD has a Yearly Dividend Yield of 2.20%.
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.
Compared to an average S&P500 Dividend Yield of 2.38, HD has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.2% |
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 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 2Y6.13%
EPS Next 3Y7.05%
415.69
-1.79 (-0.43%)
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 Cap413.77B
Analysts77.92
Price Target439.88 (5.82%)
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 | 27.84 | ||
| Fwd PE | 24.74 | ||
| P/S | 2.51 | ||
| P/FCF | 29.08 | ||
| P/OCF | 23.15 | ||
| P/B | 38.8 | ||
| P/tB | N/A | ||
| EV/EBITDA | 18.1 |
EPS(TTM)14.93
EY3.59%
EPS(NY)16.81
Fwd EY4.04%
FCF(TTM)14.3
FCFY3.44%
OCF(TTM)17.95
OCFY4.32%
SpS165.82
BVpS10.71
TBVpS-17.81
PEG (NY)7.49
PEG (5Y)3.57
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
WACC9.44%
ROIC/WACC2.52
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%