Is Home Depot a good stock to buy?
Home Depot's analyst rating consensus is a Moderate Buy. This is based on the ratings of 27 Wall Streets Analysts.
Dividend and price
Buying Home Depot stock could make sense for investors who want to take advantage of market pessimism in the home improvement niche. Yet the stock isn't especially cheap. Shares are valued at 2.4 times sales today, a post-pandemic high.
The Winner: Home Depot
While Home Depot stock is ever-so-slightly more expensive than Lowe's stock on a price-to-earnings basis, its stronger financial position and higher dividend yield make it the better choice to invest in right now.
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As of 2024-03-30, the Fair Value of Home Depot Inc (HD) is 109.64 USD. This value is based on the Peter Lynch's Fair Value formula. With the current market price of 383.6 USD, the upside of Home Depot Inc is -71.4%.
Home Depot (NYSE: HD) has historically been a wildly successful investment. Shares have produced a total return, including dividends, of 6,680% in the last 30 years. This gain crushes the broader S&P 500 index. The bulls are hoping the good times will keep rolling.
For 2024, Home Depot is expected to forecast roughly flat comparable sales, improving from an estimated 3.2% decline in 2023, according to LSEG data. Lowe's is likely to forecast a 1.1% drop, compared with a projected 4.8% fall last year.
Risk and Uncertainty. We give Home Depot a Medium Uncertainty Rating owing to its strong brand recognition, which has helped stabilize sales through the cycle. Sales are largely driven by greater consumer willingness to spend on category goods, with stable existing-home price growth and decent turnover.
Long-Term Home Depot Stock Price Predictions
Based on the average yearly growth of the Home Depot stock in the last 10 years, the HD stock forecast for the beginning of next year is $ 444.24.
Home Depot also comes out ahead on key financial metrics like profitability, cash flow, and return on invested capital (ROIC). Its operating profit margin is several percentage points above Lowe's and ROIC, a great indicator of efficiency, is near 40% compared to Lowe's 30% rate.
Who is bigger Home Depot or Lowes?
The company was founded in 1946 by Lucius Smith Lowe and his son, Robert L. Lowe, in North Wilkesboro, North Carolina. Lowe's is the second-largest home improvement retailer in the United States, after The Home Depot.
Home Depot's CEO is Ted Decker, appointed in Oct 2020, has a tenure of 3.42 years. total yearly compensation is $14.62M, comprised of 9.4% salary and 90.6% bonuses, including company stock and options. directly owns 0.012% of the company's shares, worth $45.41M.
The all-time high Home Depot stock closing price was 395.20 on March 21, 2024. The Home Depot 52-week high stock price is 396.87, which is 3.5% above the current share price. The Home Depot 52-week low stock price is 274.26, which is 28.5% below the current share price.
With its 2-star rating, we believe Home Depot's stock is overvalued compared with our long-term fair value estimate. Given the maturity of the domestic home improvement industry, we expect demand to largely depend on changes in the real estate market, driven by prices, interest rates, turnover, and lending standards.
HD implied volatility (IV) is 16.9, which is in the 19% percentile rank. This means that 19% of the time the IV was lower in the last year than the current level. The current IV (16.9) is -4.6% below its 20 day moving average (17.7) indicating implied volatility is trending lower.
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With a trailing dividend yield of 2.15% and a forward dividend yield of 2.33%, The Home Depot Inc currently signals a positive outlook for dividend growth.
With a market capitalization of $345 billion and trailing-12-month revenue of $154 billion, Home Depot (HD -0.51%) is a business that just about every investor is familiar with these days. Through its network of more than 2,000 stores in the U.S., the company sells various home improvement products and supplies.
Home improvement specialist Home Depot (NYSE: HD) is one of the nation's largest retailers, a stalwart by almost any definition. It's also carrying a lot of debt: $37.5 billion in long-term liabilities as of the quarter ending Oct. 29. 2023.
Home Depot posted a 3.5% drop in global same-store sales alongside a 4% decline in US comparable sales year-over-year. Additionally, Home Depot cites slowing demand in its weaker than expected full-year outlook for 2024.
Why are Home Depot stocks so high?
Home Depot posted revenue gains of 19.9% and 14.4%, respectively, in fiscal 2020 and fiscal 2021. The surge in demand can be credited to low interest rates, a robust economic backdrop, and consumers who were flush with cash and ready to tackle larger renovation projects.
Home Depot stock price stood at $390.28
According to the latest long-term forecast, Home Depot price will hit $500 by the end of 2024 and then $700 by the end of 2026. Home Depot will rise to $800 within the year of 2028, $900 in 2029, $1000 in 2030, $1100 in 2032 and $1200 in 2034.
In 2023, home sales fell off a cliff for the second straight year. Demand for renovation projects has been soft, causing Home Depot's sales to decline. The industry backdrop favors Home Depot over the long term.
While Home Depot is not recession-proof, since sales can decline when the housing market weakens, it is still a safe stock to hold for the long term. Management doesn't stop looking for ways to strengthen the business, so investors should expect Home Depot to exit a downturn in the economy stronger than before.
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