The Home Depot, Inc. (NYSE: HD) 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.
Company Overview
- Market Cap: 352.449 Billion
- PE Ratio: 23.81
- EPS: 14.93
- Dividend Yield: 2.53%
Home Depot enjoys a number of competitive advantages that should help it deliver solid long-term returns. First, Home Depot more or less competes in a duopoly with Lowe’s in home improvement retail, which is an industry with high barriers to entry and relatively little competition. The lack of competition and Home Depot’s business model has earned it high-operating margins for a retailer. However, the best reason to buy Home Depot stock now is probably that the sluggish housing market is likely to start recovering soon. Since the Federal Reserve is expected to start lowering interest rates in September, this should provide some relief to weary homebuyers tired of 7% mortgage rates. Lower rates will also encourage homebuilders to build more as it will lower the cost of borrowing and make it easier for Americans to tap into a home equity line of credit to do renovations. A year from now, borrowing rates could be significantly lower, driving Home Depot’s growth and lifting the stock. Therefore, Home Depot is the best retail stock to own for long term investors.