Head to Head Analysis: Home Depot (HD) versus Its Rivals

Home Depot (NYSE:HD) is one of 14 public companies in the “RETAIL – HOME FRN” industry, but how does it compare to its rivals? We will compare Home Depot to similar businesses based on the strength of its earnings, dividends, analyst recommendations, institutional ownership, profitability, valuation and risk.

Profitability

This table compares Home Depot and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Depot	8.98%	242.51%	15.45%
Home Depot Competitors	6.52%	33.77%	8.67%

Insider and Institutional Ownership

70.9% of Home Depot shares are held by institutional investors. Comparatively, 67.1% of shares of all “RETAIL – HOME FRN” companies are held by institutional investors. 0.1% of Home Depot shares are held by insiders. Comparatively, 5.2% of shares of all “RETAIL – HOME FRN” companies are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Home Depot pays an annual dividend of $9.20 per share and has a dividend yield of 2.6%. Home Depot pays out 62.4% of its earnings in the form of a dividend. As a group, “RETAIL – HOME FRN” companies pay a dividend yield of 2.5% and pay out 49.0% of their earnings in the form of a dividend. Home Depot has increased its dividend for 16 consecutive years.

Valuation and Earnings

This table compares Home Depot and its rivals top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Home Depot	$159.51 billion	$14.81 billion	24.21
Home Depot Competitors	$26.26 billion	$2.36 billion	16.47

Home Depot has higher revenue and earnings than its rivals. Home Depot is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Home Depot and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Depot	0	7	21	1	2.79
Home Depot Competitors	171	1316	2026	38	2.54

Home Depot currently has a consensus price target of $426.77, suggesting a potential upside of 19.60%. As a group, “RETAIL – HOME FRN” companies have a potential upside of 24.42%. Given Home Depot’s rivals higher probable upside, analysts clearly believe Home Depot has less favorable growth aspects than its rivals.

Risk and Volatility

Home Depot has a beta of 1.02, meaning that its stock price is 2% more volatile than the S&P 500. Comparatively, Home Depot’s rivals have a beta of 1.48, meaning that their average stock price is 48% more volatile than the S&P 500.

Summary

Home Depot beats its rivals on 11 of the 15 factors compared.

Home Depot Company Profile

The Home Depot, Inc. operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows. In addition, it provides tool and equipment rental services. The company primarily serves homeowners; and professional renovators/remodelers, general contractors, maintenance professionals, handymen, property managers, and building service contractors, as well as specialty tradesmen, such as electricians, plumbers, and painters. It sells its products through websites, including homedepot.com; homedepot.ca and homedepot.com.mx; blinds.com, justblinds.com, and americanblinds.com for custom window coverings; thecompanystore.com, an online site for textiles and décor products; hdsupply.com for maintenance, repair, and operations (MRO) products and related services; and The Home Depot stores. The Home Depot, Inc. was incorporated in 1978 and is headquartered in Atlanta, Georgia.