HOME DEPOT INC (HD) Fundamental Analysis & Valuation
NYSE:HD • US4370761029
361.68 USD
-7.43 (-2.01%)
At close: Mar 5, 2026
362 USD
+0.32 (+0.09%)
After Hours: 3/5/2026, 5:07:22 PM
This HD fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
We assign a fundamental rating of 5 out of 10 to HD. HD was compared to 123 industry peers in the Specialty Retail industry. HD scores excellent on profitability, but there are concerns on its financial health. HD has a decent growth rate and is not valued too expensively.
1. HD Profitability Analysis
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.
- Each year in the past 5 years HD had a positive operating cash flow.
1.2 Ratios
- HD has a better Return On Assets (13.47%) than 89.43% of its industry peers.
- HD has a Return On Equity of 110.48%. This is amongst the best in the industry. HD outperforms 99.19% of its industry peers.
- HD's Return On Invested Capital of 20.64% is amongst the best of the industry. HD outperforms 88.62% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for HD is significantly above the industry average of 13.62%.
- The 3 year average ROIC (25.05%) for HD is well above the current ROIC(20.64%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.47% | ||
| ROE | 110.48% | ||
| ROIC | 20.64% |
ROA(3y)16.22%
ROA(5y)18.78%
ROE(3y)594.65%
ROE(5y)N/A
ROIC(3y)25.05%
ROIC(5y)29.93%
1.3 Margins
- The Profit Margin of HD (8.60%) is better than 86.99% of its industry peers.
- In the last couple of years the Profit Margin of HD has declined.
- HD has a better Operating Margin (12.68%) than 87.80% of its industry peers.
- HD's Operating Margin has declined in the last couple of years.
- With a Gross Margin value of 33.32%, HD perfoms like the industry average, outperforming 41.46% 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 | 12.68% | ||
| PM (TTM) | 8.6% | ||
| GM | 33.32% |
OM growth 3Y-6%
OM growth 5Y-3.74%
PM growth 3Y-7.52%
PM growth 5Y-2.47%
GM growth 3Y-0.21%
GM growth 5Y-0.38%
2. HD Health Analysis
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so HD is creating value.
- The number of shares outstanding for HD remains at a similar level compared to 1 year ago.
- The number of shares outstanding for HD has been reduced compared to 5 years ago.
- HD has a better debt/assets ratio than last year.
2.2 Solvency
- HD has a debt to FCF ratio of 4.41. This is a neutral value as HD would need 4.41 years to pay back of all of its debts.
- HD has a Debt to FCF ratio of 4.41. This is in the better half of the industry: HD outperforms 66.67% of its industry peers.
- HD has a Debt/Equity ratio of 3.97. This is a high value indicating a heavy dependency on external financing.
- With a Debt to Equity ratio value of 3.97, HD is not doing good in the industry: 75.61% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.97 | ||
| Debt/FCF | 4.41 | ||
| Altman-Z | N/A |
ROIC/WACC2.23
WACC9.26%
2.3 Liquidity
- HD has a Current Ratio of 1.06. 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 1.06 is on the low side compared to the rest of the industry. HD is outperformed by 69.92% of its industry peers.
- A Quick Ratio of 0.26 indicates that HD may have some problems paying its short term obligations.
- With a Quick ratio value of 0.26, HD is not doing good in the industry: 77.24% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.26 |
3. HD Growth Analysis
3.1 Past
- HD shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.56%.
- Measured over the past 5 years, HD shows a small growth in Earnings Per Share. The EPS has been growing by 3.57% on average per year.
- Looking at the last year, HD shows a small growth in Revenue. The Revenue has grown by 3.24% in the last year.
- The Revenue has been growing slightly by 4.51% on average over the past years.
EPS 1Y (TTM)-4.56%
EPS 3Y-5.18%
EPS 5Y3.57%
EPS Q2Q%-14.29%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y1.52%
Revenue growth 5Y4.51%
Sales Q2Q%-3.79%
3.2 Future
- The Earnings Per Share is expected to grow by 7.60% 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 3.82% yearly.
EPS Next Y3.9%
EPS Next 2Y6.42%
EPS Next 3Y6.93%
EPS Next 5Y7.6%
Revenue Next Year3.96%
Revenue Next 2Y4.18%
Revenue Next 3Y4.24%
Revenue Next 5Y3.82%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better 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 stable.
4. HD Valuation Analysis
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 25.42, HD can be considered very expensive at the moment.
- Based on the Price/Earnings ratio, HD is valued a bit cheaper than the industry average as 64.23% of the companies are valued more expensively.
- The average S&P500 Price/Earnings ratio is at 27.03. HD is around the same levels.
- HD is valuated rather expensively with a Price/Forward Earnings ratio of 23.28.
- 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 25.11, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.42 | ||
| Fwd PE | 23.28 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as HD.
- Based on the Price/Free Cash Flow ratio, HD is valued a bit cheaper than the industry average as 61.79% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 28.47 | ||
| EV/EBITDA | 16.69 |
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)6.52
PEG (5Y)7.12
EPS Next 2Y6.42%
EPS Next 3Y6.93%
5. HD Dividend Analysis
5.1 Amount
- With a Yearly Dividend Yield of 2.48%, HD has a reasonable but not impressive dividend return.
- Compared to an average industry Dividend Yield of 2.33, HD pays a better dividend. On top of this HD pays more dividend than 83.74% of the companies listed in the same industry.
- Compared to an average S&P500 Dividend Yield of 1.82, HD pays a bit more dividend than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
5.2 History
- On average, the dividend of HD grows each year by 8.96%, 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)8.96%
Div Incr Years15
Div Non Decr Years34
5.3 Sustainability
- 64.65% 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.
DP64.65%
EPS Next 2Y6.42%
EPS Next 3Y6.93%
HD Fundamentals: All Metrics, Ratios and Statistics
361.68
-7.43 (-2.01%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)11-18 2025-11-18/bmo
Earnings (Next)05-18 2026-05-18
Inst Owners74.02%
Inst Owner Change1.3%
Ins Owners0.04%
Ins Owner Change-0.22%
Market Cap360.06B
Revenue(TTM)164.68B
Net Income(TTM)14.16B
Analysts76.09
Price Target407.6 (12.7%)
Short Float %1.02%
Short Ratio2.38
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.48% |
Yearly Dividend9.2
Dividend Growth(5Y)8.96%
DP64.65%
Div Incr Years15
Div Non Decr Years34
Ex-DateN/A
Surprises & Revisions
EPS beat(2)N/A
Avg EPS beat(2)N/A
Min EPS beat(2)N/A
Max EPS beat(2)N/A
EPS beat(4)N/A
Avg EPS beat(4)N/A
Min EPS beat(4)N/A
Max EPS beat(4)N/A
EPS beat(8)N/A
Avg EPS beat(8)N/A
EPS beat(12)N/A
Avg EPS beat(12)N/A
EPS beat(16)N/A
Avg EPS beat(16)N/A
Revenue beat(2)0
Avg Revenue beat(2)-2.52%
Min Revenue beat(2)-2.71%
Max Revenue beat(2)-2.32%
Revenue beat(4)0
Avg Revenue beat(4)-2.42%
Min Revenue beat(4)-3.08%
Max Revenue beat(4)-1.56%
Revenue beat(8)0
Avg Revenue beat(8)-2.27%
Revenue beat(12)0
Avg Revenue beat(12)-2.51%
Revenue beat(16)1
Avg Revenue beat(16)-2.07%
PT rev (1m)1.36%
PT rev (3m)-6.73%
EPS NQ rev (1m)-0.17%
EPS NQ rev (3m)-2%
EPS NY rev (1m)0%
EPS NY rev (3m)-7.35%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)-0.29%
Revenue NY rev (1m)-0.02%
Revenue NY rev (3m)-0.26%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 25.42 | ||
| Fwd PE | 23.28 | ||
| P/S | 2.19 | ||
| P/FCF | 28.47 | ||
| P/OCF | 22.06 | ||
| P/B | 28.1 | ||
| P/tB | N/A | ||
| EV/EBITDA | 16.69 |
EPS(TTM)14.23
EY3.93%
EPS(NY)15.53
Fwd EY4.29%
FCF(TTM)12.7
FCFY3.51%
OCF(TTM)16.4
OCFY4.53%
SpS165.43
BVpS12.87
TBVpS-19.95
PEG (NY)6.52
PEG (5Y)7.12
Graham Number64.19
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 13.47% | ||
| ROE | 110.48% | ||
| ROCE | 28.75% | ||
| ROIC | 20.64% | ||
| ROICexc | 21.01% | ||
| ROICexgc | 36.96% | ||
| OM | 12.68% | ||
| PM (TTM) | 8.6% | ||
| GM | 33.32% | ||
| FCFM | 7.68% |
ROA(3y)16.22%
ROA(5y)18.78%
ROE(3y)594.65%
ROE(5y)N/A
ROIC(3y)25.05%
ROIC(5y)29.93%
ROICexc(3y)26.13%
ROICexc(5y)31.4%
ROICexgc(3y)41.07%
ROICexgc(5y)45.33%
ROCE(3y)33.48%
ROCE(5y)39.89%
ROICexgc growth 3Y-7.04%
ROICexgc growth 5Y-4.98%
ROICexc growth 3Y-16.59%
ROICexc growth 5Y-11.68%
OM growth 3Y-6%
OM growth 5Y-3.74%
PM growth 3Y-7.52%
PM growth 5Y-2.47%
GM growth 3Y-0.21%
GM growth 5Y-0.38%
F-Score4
Asset Turnover1.57
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 3.97 | ||
| Debt/FCF | 4.41 | ||
| Debt/EBITDA | 2.03 | ||
| Cap/Depr | 89.27% | ||
| Cap/Sales | 2.23% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 65.27% | ||
| Profit Quality | 89.33% | ||
| Current Ratio | 1.06 | ||
| Quick Ratio | 0.26 | ||
| Altman-Z | N/A |
F-Score4
WACC9.26%
ROIC/WACC2.23
Cap/Depr(3y)93.76%
Cap/Depr(5y)95.16%
Cap/Sales(3y)2.18%
Cap/Sales(5y)2.04%
Profit Quality(3y)106.03%
Profit Quality(5y)94.11%
High Growth Momentum
Growth
EPS 1Y (TTM)-4.56%
EPS 3Y-5.18%
EPS 5Y3.57%
EPS Q2Q%-14.29%
EPS Next Y3.9%
EPS Next 2Y6.42%
EPS Next 3Y6.93%
EPS Next 5Y7.6%
Revenue 1Y (TTM)3.24%
Revenue growth 3Y1.52%
Revenue growth 5Y4.51%
Sales Q2Q%-3.79%
Revenue Next Year3.96%
Revenue Next 2Y4.18%
Revenue Next 3Y4.24%
Revenue Next 5Y3.82%
EBIT growth 1Y-2.95%
EBIT growth 3Y-4.57%
EBIT growth 5Y0.6%
EBIT Next Year19.72%
EBIT Next 3Y10.34%
EBIT Next 5Y7.49%
FCF growth 1Y-22.54%
FCF growth 3Y3.23%
FCF growth 5Y-5.04%
OCF growth 1Y-17.59%
OCF growth 3Y3.76%
OCF growth 5Y-2.82%
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 25.42 and the Price/Book (PB) ratio is 28.1.
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 64.65%.