Home Depot (NYSE:HD – Get Free Report) and Fortune Brands Innovations (NYSE:FBIN – Get Free Report) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, valuation, analyst recommendations and dividends.
Analyst Recommendations
This is a breakdown of recent ratings for Home Depot and Fortune Brands Innovations, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Home Depot | 0 | 7 | 20 | 1 | 2.79 |
| Fortune Brands Innovations | 0 | 6 | 5 | 0 | 2.45 |
Home Depot currently has a consensus price target of $426.77, indicating a potential upside of 18.77%. Fortune Brands Innovations has a consensus price target of $77.27, indicating a potential upside of 44.79%. Given Fortune Brands Innovations’ higher possible upside, analysts plainly believe Fortune Brands Innovations is more favorable than Home Depot.
Profitability
| Net Margins | Return on Equity | Return on Assets | |
| Home Depot | 8.98% | 242.51% | 15.45% |
| Fortune Brands Innovations | 9.42% | 20.96% | 7.50% |
Dividends
Home Depot pays an annual dividend of $9.20 per share and has a dividend yield of 2.6%. Fortune Brands Innovations pays an annual dividend of $1.00 per share and has a dividend yield of 1.9%. Home Depot pays out 62.4% of its earnings in the form of a dividend. Fortune Brands Innovations pays out 29.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Home Depot has raised its dividend for 16 consecutive years and Fortune Brands Innovations has raised its dividend for 2 consecutive years. Home Depot is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Valuation and Earnings
This table compares Home Depot and Fortune Brands Innovations”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Home Depot | $159.51 billion | 2.24 | $14.81 billion | $14.74 | 24.38 |
| Fortune Brands Innovations | $4.61 billion | 1.39 | $471.90 million | $3.41 | 15.65 |
Home Depot has higher revenue and earnings than Fortune Brands Innovations. Fortune Brands Innovations is trading at a lower price-to-earnings ratio than Home Depot, indicating that it is currently the more affordable of the two stocks.
Insider and Institutional Ownership
70.9% of Home Depot shares are owned by institutional investors. Comparatively, 87.6% of Fortune Brands Innovations shares are owned by institutional investors. 0.1% of Home Depot shares are owned by insiders. Comparatively, 1.0% of Fortune Brands Innovations shares are owned 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.
Risk & Volatility
Home Depot has a beta of 1, indicating that its stock price has a similar volatility profile to the S&P 500.Comparatively, Fortune Brands Innovations has a beta of 1.36, indicating that its stock price is 36% more volatile than the S&P 500.
Summary
Home Depot beats Fortune Brands Innovations on 12 of the 18 factors compared between the two stocks.
About Home Depot
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.
About Fortune Brands Innovations
Fortune Brands Innovations, Inc. provides home and security products for residential home repair, remodeling, new construction, and security applications in the United States and internationally. The company operates through three segments: Water, Outdoors, and Security. The Water segment manufactures or assembles, and sells faucets, accessories, kitchen sinks, and waste disposals under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, and Schaub brands. The Outdoors segment manufactures and sells fiberglass and steel entry door systems under the Therma-Tru brand; storm, screen, and security doors under the Larson brand; composite decking, railing, and cladding under the Fiberon brand; and urethane millwork under the Fypon brand. The Security segment manufactures, sources, and distributes locks, safety and security devices, and electronic security products under the Master Lock, American Lock, Yale, and August brands; and fire-resistant safes, security containers, and commercial cabinets under the SentrySafe brand. The company sells its products through various sales channels, including kitchen and bath dealers, wholesalers oriented toward builders or professional remodelers, industrial and locksmith distributors, do-it-yourself remodeling-oriented home centers, showrooms, e-commerce, and other retail outlets. Fortune Brands Innovations, Inc. was incorporated in 1988 and is headquartered in Deerfield, Illinois.
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