Home Depot (NYSE:HD) is the world’s largest home improvement specialty retailer. The company has been on a solid profit run in the last three months and it’s time to check back in and see if shares are still an attractive buy. Let’s take a look at the company and make a call on the stock.
This company’s motto is “Home Improvement Made Easy.” That’s because Home Depot is a one-stop shop for building and updating homes, with products available through both physical “big box” stores and an extensive online website.
The company also offers tool and truck rental services as well as its own credit center to facilitate financing large purchases. The company has store in all 50 U.S. states as well as in Mexico, Canada and China.
In terms of market capitalization, Home Depot is the second largest company in the Home Improvement Stores Industry. And, out of the 11 companies in this industry, Home Depot comes out on top in regards to most fundamentals.
Most notably, the company’s P/E to growth and dividend yield (2.3%) are the best in the industry; the company’s return on equity is second-best. The company is also in the top half in terms of sales growth, earnings growth and long-term growth rate. Lowe‘s (NYSE:LOW), its main competitor, can’t even come close.
What’s interesting about Home Depot is that in terms of sales, Christmas comes in spring. In fact, last year the company branded its own Spring Black Friday event, which fell on four different weekends on a market-by-market basis.
The company announced sales of everything from outdoor grills to lawn care, and hired an additional 60,000 workers to deal with the extra large “spring cleaning” crowd.
The company is scheduled to report earnings on May 15 and current estimates are for 5.4% sales growth and 26% earnings growth.
Before you buy any stock, you should always run it through my free Portfolio Grader ratings system. Over the past 12 months, this stock has steadily improved from a hold to a buy. Most importantly, its buying pressure has increased as the company has piqued investors’ interest. The stock is up 15.5% in the last three months.
This is an A-rated stock and gets my strong buy recommendation.
Recommendation: Strong Buy