Is Home Depot a good stock to buy long term?
And even if the near-term home construction outlook remains wobbly, Home Depot stock is still a long-term buying opportunity. Analysis from Moody's suggests that the nation will still need 1.5 million to 2 million more homes than it will have at the end of this year even if homebuilding activity is strong in 2024.
Home Depot (HD -0.92%) 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.
Home Depot's stock has underperformed the market in the past year, yet you're still paying a decent premium to own this business. Direct cash returns will help pad your returns, however. That's because Home Depot generated ample free cash flow this year even though earnings declined.
In the last five years, Home Depot's operating margin averaged 14.7%, beating smaller rival Lowe's Companies. This consistent profitability has enabled the business to generate lots of free cash flow, which management has used to adopt a shareholder-friendly capital allocation policy that has boosted investor returns.
| Stock | Sector | Trailing 12-month dividend yield* |
|---|---|---|
| Abbott Laboratories (ABT) | Health care | 1.9% |
| Stanley Black & Decker Inc. (SWK) | Industrials | 3.5% |
| Atmos Energy Corp. (ATO) | Utilities | 2.7% |
| T. Rowe Price Group Inc. (TROW) | Financials | 4.3% |
Thanks to its stellar lineup of products and services tailored for every project, Home Depot and its market seem ripe for delivering more. Statista research predicts the U.S. home improvement scene will balloon to a jaw-dropping $621 billion by 2025, jumping from $457 billion in 2020.
Ten Year Stock Price Total Return for Home Depot is calculated as follows: Last Close Price [ 362.05 ] / Adj Prior Close Price [ 60.24 ] (-) 1 (=) Total Return [ 501.0% ] Prior price dividend adjustment factor is 0.79.
Home Depot is a giant that has outpaced the broader markets by a wide margin in the last two decades. HD stock still remains a top investment choice due to its wide economic moat, growing dividends, and steady earnings.
Dividend Yield vs Market
Notable Dividend: HD's dividend (2.7%) is higher than the bottom 25% of dividend payers in the US market (1.59%). High Dividend: HD's dividend (2.7%) is low compared to the top 25% of dividend payers in the US market (4.88%).
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.
How is Home Depot doing financially?
Home Depot Inc. is projected to report an 18% drop in net income and a near 4% decline in revenue for its fiscal fourth quarter ended in January. The retailer's average sales per square foot are projected to drop by 4% as consumers move away from buying big-ticket items.
- 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 18.3% above the current share price.
- The Home Depot 52-week low stock price is 274.26, which is 18.2% below the current share price.
Net earnings for the first quarter of fiscal 2023 were $3.9 billion, or $3.82 per diluted share, compared with net earnings of $4.2 billion, or $4.09 per diluted share, in the same period of fiscal 2022.
Investing in shares for the long term can offer lucrative opportunities for growth and stability. Companies like L&T, HUL, and Godrej Consumer Products present solid fundamentals.
| S.No. | Company | Industry/Sector |
|---|---|---|
| 1. | Tata Consultancy Services Ltd | IT - Software |
| 2. | Infosys Ltd | IT - Software |
| 3. | Hindustan Unilever Ltd | FMCG |
| 4. | Reliance Industries Ltd | Refineries |
| S.No. | Name | CMP Rs. |
|---|---|---|
| 2. | Brightcom Group | 14.93 |
| 3. | Easy Trip Plann. | 47.08 |
| 4. | Radhika Jeweltec | 64.71 |
| 5. | KMC Speciality | 91.71 |
According to Wall Street consensus analyst estimates, Home Depot's revenue and earnings per share are slated to grow at compound annual rates of 2.9% and 6.4%, respectively, over the next three years.
Home Depot now expects an earnings per share to decline between 9% and 11% in 2023 and same store sales to fall 3% to 4%. The company previously anticipated an earnings per share drop between 7% and 13% and a same-store sales decline of 2% to 5%.
Home Depot stock prediction for 1 year from now: $ 399.51 (19.11%) Home Depot stock forecast for 2025: $ 388.52 (15.84%) Home Depot stock prediction for 2030: $ 810.27 (141.58%)
Home Depot Stock Price Forecast 2024-2025
The forecasted Home Depot price at the end of 2024 is $385 - and the year to year change +11%. The rise from today to year-end: +15%. In the middle of 2024, we expect to see $347.
How many years has Home Depot paid a dividend?
| Declared | Ex-Date | Record |
|---|---|---|
| 05/23/19 | 06/05/19 | 06/06/19 |
| 02/25/19 | 03/13/19 | 03/14/19 |
| 11/15/18 | 11/28/18 | 11/29/18 |
| 08/16/18 | 08/29/18 | 08/30/18 |
( HD ) pays dividends on a quarterly basis. The Home Depot, Inc. ( HD ) has increased its dividends for 15 consecutive years. This is a positive sign of the company's financial stability and its ability to pay consistent dividends in the future.
Largest shareholders include Vanguard Group Inc, BlackRock Inc., State Street Corp, Capital World Investors, VTSMX - Vanguard Total Stock Market Index Fund Investor Shares, VFINX - Vanguard 500 Index Fund Investor Shares, Geode Capital Management, Llc, Morgan Stanley, Capital Research Global Investors, and Bank Of ...
Dealing with macro headwinds
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.
Shares of Home Depot (NYSE: HD) finished lower today as investors seemed to give a thumbs-down to its deal to buy SRS Distribution, a leading specialty-trade company that will help it expand its presence in the pro market.
