The Home Depot Inc
🇺🇸 HD · NYSE/NASDAQ · US4370761029
Consumer
USD 297.51 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
20.9
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: 297.51 ÷ 14.20 = 20.9
TTM period through: 2026-01-31
Forward P/E (estimated): 21.2
Based on analyst estimates
Reference: Provider P/E (Trailing): 21.4
Yield (Fwd)
3.13%
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): 3.05%
Div. Growth (5Y CAGR)
8.9%
Growth Streak
9 yrs
Consecutive years of increase
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
15.1x
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 an exceptionally high-quality retail leader operating in a dominant duopoly, backed by a robust track record of double-digit dividend growth and resilient free cash flow. While the stock's yield has recently pushed above 3% amid temporary cyclical headwinds from a sluggish housing market, the current P/E of 21 remains elevated for new capital deployment. Existing shareholders should maintain positions given the exceptionally strong fundamentals, but new investors may want to wait for a more attractive valuation.
Sector Context
The Home Depot is the world's largest home improvement specialty retailer, generating revenue through the sale of building materials, hardware, and services to both DIY consumers and professional contractors. For dividend investors, its dominant duopoly position with Lowe's creates immense scale advantages and pricing power, while the ongoing need for residential maintenance and repair provides a defensive, recurring revenue stream even during economic downturns.
Temporary Opportunity Identified
Cyclical headwinds from prolonged high interest rates, persistent inflation, and a sluggish housing turnover market are pressuring near-term earnings.
📊 Strategy Analysis
- • Exceptional dividend track record with a 14.3% 10-year CAGR, now offering a yield above 3% supported by a healthy 63% payout ratio.
- • Dominant duopoly position in home improvement retail with deep competitive moats, scale advantages, and a sticky professional contractor customer base.
- • Robust financial stability demonstrated by a conservative Net Debt/EBITDA ratio of 2.6x, remaining well below the 3.0x target threshold.
⚠ What to Watch
- • Current P/E multiple of 21 remains above the strategy's optimal 8-15x range, offering limited margin of safety.
- • Prolonged high interest rates and frozen housing turnover continue to pressure near-term earnings and consumer discretionary spending.
- • Mounting legal scrutiny, including recent class-action lawsuits regarding data privacy and marketing practices, introduces minor operational distractions.
📊 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: 2026-05-16
Disclaimer: This information is for educational purposes only. Not financial advice.