Floor & Decor (NYSE:FND – Get Free Report) and Home Depot (NYSE:HD – Get Free Report) are both consumer discretionary companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, earnings, analyst recommendations, profitability and risk.
Profitability
This table compares Floor & Decor and Home Depot’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Floor & Decor | 4.93% | 8.20% | 3.58% |
| Home Depot | 8.41% | 106.42% | 13.76% |
Analyst Recommendations
This is a summary of recent ratings for Floor & Decor and Home Depot, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Floor & Decor | 5 | 12 | 4 | 0 | 1.95 |
| Home Depot | 1 | 13 | 18 | 1 | 2.58 |
Floor & Decor presently has a consensus target price of $54.70, suggesting a potential upside of 13.08%. Home Depot has a consensus target price of $375.31, suggesting a potential upside of 12.37%. Given Floor & Decor’s higher probable upside, equities research analysts clearly believe Floor & Decor is more favorable than Home Depot.
Volatility and Risk
Floor & Decor has a beta of 1.6, meaning that its stock price is 60% more volatile than the S&P 500. Comparatively, Home Depot has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.
Earnings and Valuation
This table compares Floor & Decor and Home Depot”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Floor & Decor | $4.68 billion | 1.10 | $208.65 million | $2.23 | 21.69 |
| Home Depot | $164.68 billion | 2.02 | $14.16 billion | $14.29 | 23.37 |
Home Depot has higher revenue and earnings than Floor & Decor. Floor & Decor is trading at a lower price-to-earnings ratio than Home Depot, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
70.9% of Home Depot shares are owned by institutional investors. 1.8% of Floor & Decor shares are owned by insiders. Comparatively, 0.1% of Home Depot shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
Summary
Home Depot beats Floor & Decor on 12 of the 15 factors compared between the two stocks.
About Floor & Decor
Floor & Decor Holdings, Inc. engages in the retail of hard surface flooring and related accessories. It provides wood, stone, and flooring products. Its products include vinyl, laminate, and tiles with materials installation for living rooms, kitchen, bathrooms, and walls. The company was founded by George Vincent West in 2000 and is headquartered in Atlanta, GA.
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.
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