Comparing Home Depot (HD) and Its Rivals

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

Institutional and Insider 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 large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Home Depot pays an annual dividend of $9.20 per share and has a dividend yield of 2.5%. 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 2.4% and pay out 49.0% of their earnings in the form of a dividend. Home Depot has raised its dividend for 16 consecutive years.

Profitability

This table compares Home Depot and its competitors’ 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%

Earnings & Valuation

This table compares Home Depot and its competitors gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Home Depot	$159.51 billion	$14.81 billion	25.31
Home Depot Competitors	$26.26 billion	$2.36 billion	17.37

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

Volatility & Risk

Home Depot has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Home Depot’s competitors have a beta of 1.46, suggesting that their average stock price is 46% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Home Depot and its competitors, 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	173	1317	2028	38	2.54

Home Depot currently has a consensus target price of $426.77, indicating a potential upside of 14.39%. As a group, “RETAIL – HOME FRN” companies have a potential upside of 17.82%. Given Home Depot’s competitors higher possible upside, analysts plainly believe Home Depot has less favorable growth aspects than its competitors.

Summary

Home Depot beats its competitors 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.