The Home Depot Inc
🇺🇸 HD · NYSE/NASDAQ · US4370761029
Consumer
USD 321.63 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
22.6
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 321.63 ÷ 14.20 = 22.6
TTM period through: 2026-01-31
Forward P/E (estimated): 22.0
Based on analyst estimates
Reference: Provider P/E (Trailing): 22.6
Yield (Fwd)
2.90%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.80%
Net Debt/EBITDA (TTM)
2.6x
Latest quarter: 13.5x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-01-31
Latest quarter (2026-01-31): 13.5x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
65.6%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 64.7%
Cash Flow Payout (TTM): 56.1%
FCF Coverage (TTM): 1.38x
ROE
1.5%
ROE (Return on Equity)A profitability measure: how much profit is generated from shareholders’ equity. Higher isn’t always better if it comes from high debt.
EV/EBITDA
15.6x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
The Home Depot is a high-quality retail leader operating in a dominant duopoly, backed by an exceptional track record of dividend growth and resilient free cash flow. While the company faces temporary cyclical headwinds from a sluggish housing market and elevated interest rates, the current valuation (P/E of 22.65) and 2.80% yield offer limited upside for new capital. Existing shareholders should maintain positions, but new investors may want to wait for a better entry point that provides a higher yield and margin of safety.
Sector Context
The Home Depot is the world's largest home improvement retailer, operating a dominant duopoly in the consumer sector alongside Lowe's. While retail is generally cyclical, the home improvement sector carries quasi-essential characteristics due to ongoing property maintenance needs, though big-ticket discretionary projects remain sensitive to housing market dynamics and interest rate environments.
Temporary Opportunity Identified
Macroeconomic headwinds, specifically prolonged high interest rates and 'homeowner fatigue', are freezing housing turnover and pressuring near-term retail sales.
📊 Strategy Analysis
- • Outstanding dividend track record with 10 years of consistent payouts, zero cuts, and a 14.3% 10-year growth CAGR.
- • Dividend remains highly secure with a free cash flow payout ratio of 56.06% and a healthy 1.38x FCF coverage.
- • Strong competitive moat stemming from a dominant duopoly position and expanding Pro segment TAM through strategic acquisitions.
⚠ What to Watch
- • Current P/E of 22.65 significantly exceeds the strategy's target range of 8-15x, limiting the margin of safety.
- • The 2.80% trailing dividend yield falls below the strategy's 3% minimum threshold for new capital deployment.
- • Cyclical headwinds, including prolonged high interest rates and frozen housing turnover, are negatively impacting near-term earnings.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.