NYSE:HD

Stock Analysis Report

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Executive Summary

The Home Depot, Inc. operates as a home improvement retailer. More Details


Snowflake Analysis

Established dividend payer with mediocre balance sheet.


Similar Companies

Share Price & News

How has Home Depot's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HD is less volatile than 75% of US stocks over the past 3 months, typically moving +/- 4% a week.

Volatility Over Time: HD's weekly volatility (4%) has been stable over the past year.


Market Performance


7 Day Return

1.2%

HD

-0.8%

US Specialty Retail

0.6%

US Market


1 Year Return

29.3%

HD

25.3%

US Specialty Retail

22.7%

US Market

Return vs Industry: HD exceeded the US Specialty Retail industry which returned 22.4% over the past year.

Return vs Market: HD exceeded the US Market which returned 21% over the past year.


Shareholder returns

HDIndustryMarket
7 Day1.2%-0.8%0.6%
30 Day3.7%12.8%13.1%
90 Day-3.7%4.1%4.5%
1 Year33.1%29.3%26.5%25.3%25.5%22.7%
3 Year62.7%51.3%75.2%67.8%49.0%39.1%
5 Year132.2%106.7%80.0%66.3%98.3%76.5%

Long-Term Price Volatility Vs. Market

How volatile is Home Depot's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Home Depot undervalued compared to its fair value and its price relative to the market?

23.84x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HD ($276.6) is trading above our estimate of fair value ($203.14)

Significantly Below Fair Value: HD is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HD is poor value based on its PE Ratio (23.8x) compared to the US Specialty Retail industry average (19x).

PE vs Market: HD is poor value based on its PE Ratio (23.8x) compared to the US market (19.3x).


Price to Earnings Growth Ratio

PEG Ratio: HD is poor value based on its PEG Ratio (3.9x)


Price to Book Ratio

PB vs Industry: HD is overvalued based on its PB Ratio (193.9x) compared to the US Specialty Retail industry average (2.2x).


Next Steps

Future Growth

How is Home Depot forecast to perform in the next 1 to 3 years based on estimates from 30 analysts?

6.1%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HD's forecast earnings growth (6.1% per year) is above the savings rate (2.2%).

Earnings vs Market: HD's earnings (6.1% per year) are forecast to grow slower than the US market (21.9% per year).

High Growth Earnings: HD's earnings are forecast to grow, but not significantly.

Revenue vs Market: HD's revenue (2.8% per year) is forecast to grow slower than the US market (10.3% per year).

High Growth Revenue: HD's revenue (2.8% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HD's Return on Equity is forecast to be very high in 3 years time (1143.5%).


Next Steps

Past Performance

How has Home Depot performed over the past 5 years?

12.0%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HD has high quality earnings.

Growing Profit Margin: HD's current net profit margins (9.9%) are lower than last year (10%).


Past Earnings Growth Analysis

Earnings Trend: HD's earnings have grown by 12% per year over the past 5 years.

Accelerating Growth: HD's earnings growth over the past year (12.5%) exceeds its 5-year average (12% per year).

Earnings vs Industry: HD earnings growth over the past year (12.5%) underperformed the Specialty Retail industry 14.3%.


Return on Equity

High ROE: Whilst HD's Return on Equity (813.68%) is outstanding, this metric is skewed due to their high level of debt.


Next Steps

Financial Health

How is Home Depot's financial position?


Financial Position Analysis

Short Term Liabilities: HD's short term assets ($34.5B) exceed its short term liabilities ($25.4B).

Long Term Liabilities: HD's short term assets ($34.5B) do not cover its long term liabilities ($40.0B).


Debt to Equity History and Analysis

Debt Level: HD's debt to equity ratio (2123.1%) is considered high.

Reducing Debt: HD's debt to equity ratio has increased from 275% to 2123.1% over the past 5 years.

Debt Coverage: HD's debt is well covered by operating cash flow (62.4%).

Interest Coverage: HD's interest payments on its debt are well covered by EBIT (15.4x coverage).


Balance Sheet


Next Steps

Dividend

What is Home Depot current dividend yield, its reliability and sustainability?

2.17%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HD's dividend (2.17%) is higher than the bottom 25% of dividend payers in the US market (1.5%).

High Dividend: HD's dividend (2.17%) is low compared to the top 25% of dividend payers in the US market (4.18%).


Stability and Growth of Payments

Stable Dividend: HD's dividends per share have been stable in the past 10 years.

Growing Dividend: HD's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (51.7%), HD's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HD's dividends in 3 years are forecast to be well covered by earnings (49.8% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

4.8yrs

Average management tenure


CEO

Craig Menear (62 yo)

6yrs

Tenure

US$10,889,833

Compensation

Mr. Craig A. Menear has been the Chief Executive Officer of Home Depot, Inc. since November 1, 2014 and serves as its Chairman of the Board since February 2, 2015 and served as its President since November...


CEO Compensation Analysis

Compensation vs Market: Craig's total compensation ($USD10.89M) is about average for companies of similar size in the US market ($USD10.98M).

Compensation vs Earnings: Craig's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Craig Menear
Chairman & CEO6yrsUS$10.89m0.016%
$ 47.7m
Edward Decker
President & COO0.083yrUS$3.78m0.0067%
$ 20.1m
Richard McPhail
Executive VP & CFO1.17yrsUS$2.29m0.0020%
$ 5.9m
Mark Holifield
Executive VP of Supply Chain & Product Development14.33yrsUS$3.78m0.0022%
$ 6.4m
Ann-Marie Campbell
Executive Vice President of U.S. Stores & International Operations4.75yrsUS$3.72m0.0048%
$ 14.2m
Stephen Gibbs
VP, Chief Accounting Officer & Corporate Controller0.50yrno data0.00031%
$ 923.1k
Paul Antony
Senior Vice President of Technology0.83yrno datano data
Matthew Carey
Executive VP & Chief Information Officer12.17yrsUS$3.88m0.0032%
$ 9.5m
Isabel Janci
VP of Investor Relations & Treasurer2.75yrsno datano data
Teresa Roseborough
Executive VP9yrsno data0.0019%
$ 5.8m
Sara Gorman
Senior Director of Corporate Communicationsno datano datano data
William Lennie
Executive Vice President of Outside Sales & Service5.33yrsno data0.0034%
$ 10.1m

4.8yrs

Average Tenure

57yo

Average Age

Experienced Management: HD's management team is considered experienced (4.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Craig Menear
Chairman & CEO6yrsUS$10.89m0.016%
$ 47.7m
Gerard Arpey
Independent Director5.25yrsUS$295.00k0.000090%
$ 268.0k
Gregory Brenneman
Independent Lead Director6.5yrsUS$360.00k0.0059%
$ 17.5m
Ari Bousbib
Independent Director13yrsUS$300.00k0.00093%
$ 2.8m
Jeffery Boyd
Independent Director4.08yrsUS$285.00k0.00093%
$ 2.8m
Albert Carey
Independent Director12.75yrsUS$310.00k0.00010%
$ 297.8k
Helena Foulkes
Independent Director7.17yrsUS$310.00k0.000030%
$ 89.3k
Wayne Hewett
Independent Director6.83yrsUS$290.00k0.00015%
$ 446.7k
Linda Gooden
Independent Director5.08yrsUS$285.00k0.00014%
$ 416.9k
Manuel Kadre
Independent Director2.08yrsUS$280.00k0.00028%
$ 833.8k
Joseph Brown
Independent Director9.42yrsUS$305.00k0.000090%
$ 268.0k
Stephanie Linnartz
Independent Director2.5yrsUS$295.00k0.00010%
$ 297.8k

6.1yrs

Average Tenure

60yo

Average Age

Experienced Board: HD's board of directors are considered experienced (6.1 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: HD insiders have only sold shares in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

The Home Depot, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: The Home Depot, Inc.
  • Ticker: HD
  • Exchange: NYSE
  • Founded: 1978
  • Industry: Home Improvement Retail
  • Sector: Retail
  • Market Cap: US$297.788b
  • Shares outstanding: 1.08b
  • Website: https://www.homedepot.com

Number of Employees


Location

  • The Home Depot, Inc.
  • 2455 Paces Ferry Road
  • Atlanta
  • Georgia
  • 30339
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HDNYSE (New York Stock Exchange)YesCommon StockUSUSDSep 1981
HD *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNSep 1981
HDIXTRA (XETRA Trading Platform)YesCommon StockDEEURSep 1981
HDIDB (Deutsche Boerse AG)YesCommon StockDEEURSep 1981
HDSNSE (Santiago Stock Exchange)YesCommon StockCLUSDSep 1981
HDSWX (SIX Swiss Exchange)YesCommon StockCHCHFSep 1981
HD-UETLX (Eurotlx)YesCommon StockITEURSep 1981
HDBVL (Bolsa de Valores de Lima)YesCommon StockPEUSDSep 1981
HDWBAG (Wiener Boerse AG)YesCommon StockATEURSep 1981
HDBASE (Buenos Aires Stock Exchange)CEDEAR EACH 8 REP 1ARARSSep 2001
HOME34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 28 REP 1 COMBRBRLAug 2012

Biography

The Home Depot, Inc. operates as a home improvement retailer. It operates The Home Depot stores that sell various building materials, home improvement products, lawn and garden products, and décor products...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/12/02 00:31
End of Day Share Price2020/12/01 00:00
Earnings2020/11/01
Annual Earnings2020/02/02


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.