NYSE:HD
$28.89
(2/9 2:34PM)
+1.0%
| Open | $28.87 |
Mkt Cap | $48.6 Billion |
| High | $29.08 |
52Wk High | $29.44 |
| Low | $28.57 |
52Wk Low | $17.49 |
| Volume | 12.3 Million |
Avg Vol 10D | 18.9 Million |
HD Stock Evaluation
As of the time of this report, there has been relatively little movement in price for HD over the last week. Furthermore, there has been no revision to earnings expectations or guidance. Given these factors as well as those contained in our complete analysis, we do not have enough of a catalyst to necessitate a rating change. For more detail please read the rest of our analysis of HD's valuation.
Recommendation Summary
At Ockham Research, we are always interested in understanding a company from a valuation standpoint, but even the most ardent value investor understands that there is more to the picture than simply valuation. So, we also apply a volatility studies for both the index and individual sectors. We utilize these tools in order to get a more complete picture of the investing environment. So, while most of our report highlights current valuation versus historical norms as well as peer analysis, there is still more going on behind the scenes.
As the market has enjoyed a pretty nice run in the last 12 months, we are not too terribly concerned about the long term value being diminished by this run up. We are becoming more cautious in general, but we are holding this stock's rating steady because it has strong fundamentals that justify the price it is receiving in the open market right now, but it could be in jeopardy of getting downgraded if it becomes too expensive.
The price of HD decreased by 0.11% since our last report on 01/30/2010 but the decrease is not substantial enough to sway our current outlook more positively.
As of this report, there have been no meaningful adjustments in cash earnings expectations or guidance in the last week.
HD Revenue
As a value investing shop, we are interested in seeing how HD's revenues measure up against past performances. One easily understandable way of doing that is to compare Price to Sales per share levels over a given time frame. Assuming it is available, Ockham prefers to look at ten years of history (for this stock there are 10 years of history available) and we weigh recent years more heavily. This allows us to find weighted average historical high and low Price to Sales ratios, which give us a better idea of the stock's current underlying value. Using this method, we have established a high range for Price to Sales of 1.10x and the low end of the range at 0.68x.
With respect to these historically rational metrics, notice that the current Price to Sales per share ratio for HD of 0.72x is well below its normal historic Price to Sales levels. At a price of $27.98, HD is 19% below where we would expect to see it. Clearly, this stock looks undervalued compared to historical levels, at least on a Price to Sales basis. This will positively affect our analysis because it is rare to find a stock this far below historical norms, and we would expect some price appreciation to bring this metric back towards a more normal range.
HD Cash Earnings
Cash Earnings is always one of the most important factors to review for a company and, more importantly, an investment in a stock. HD is below its historical average multiple of cash earnings as calculated by Ockham. Similar to our analysis of sales per share, Ockham looks at the last 10 years of cash earnings levels for HD to identify where the current high and low price levels have been historically in relation to profit per share. Again, we utilize a weighted average methodology which relies more heavily on recent years of data. This weighted average framework provides us with an average high Price to Cash Earnings ratio per share of 14.80 and a 9.01 low over the same period.
At its current price of $27.98, the Price to Cash Earnings ratio of 11.61 per share for HD is relatively attractive. At current profitability levels, a drop in share price would only improve our future expectations. Again, Cash Earnings is an incredibly valuable metric, and management at HD must continue on its generation to improve our overall outlook for the stock.
HD Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for HD to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for HD is $0.90 producing a current dividend yield of 3.22%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from HD against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from HD over previous years was 5.29% while the lowest dividend yield was 0.32%. Management at HD has encouraged us with a current dividend yield of 14.80% above the historical median.
Does Home Depot, Incorporated Have a Debt Issue? See the Report from Closing Bell
At Ockham, we look to make sure that any debt taken on by a company corresponds directly to increases is sales. Take a look at RazorWire for the latest on HD's debt from Closing Bell.
Home Depot, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; HD has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… They also made some positive comments from HOME DEPOT saying they would see improving comps and improving margins late they are year. > > …”
Countdown to the Closing Bell: An Extremely Hot News Day for Home Depot, Incorporated Today
If you own HD, then you need to get to a TV now. It has been mentioned in the news very frequently in the last hour.
As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HD has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HD. Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Home Depot, Incorporated will perform just about the same as the index.
“… Not even a big name upgrade for HOME DEPOT was enough to carry this market higher. Only 3 stocks are in the green. The dollar adding to 4% loss this year. …”
HD Is Among the Five Most Talked About Stocks in the News Today
If you own HD, then you need to get to a TV now. It has been mentioned in the news very frequently in the last hour.
When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Home Depot, Incorporated has actually sunk a bit in comparison to the others. Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards HD and think that it will generally perform in-line with the S&P 500. The Ockham valuation currently has a Fairly Valued stance on HD because it trades within the price range that we would expect given current market conditions and fundamentals.
“… To HOME DEPOT upgraded, they believe the turn in housing is real. Amazon. Com getting upgraded to college stewarts and web services, shares are not holding onto earlier gains. . …”
Home Depot, Incorporated Crosses Extremely Active News Threshold for the Day, Now on Countdown to the Closing Bell
The newswires are burning up right now on Home Depot, Incorporated, so check our RazorWire or turn on your TV to see why it is so active in the news.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards HD and think that it will generally perform in-line with the S&P 500. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Home Depot, Incorporated has actually sunk a bit in comparison to the others. The Ockham valuation currently has a Fairly Valued stance on HD because it trades within the price range that we would expect given current market conditions and fundamentals.
“… In fact, a number of these, including standard pacific, now have profits versus losses a year ago, so we see some improvement sort of dovetailing with that morgan stanley call on ... …”
Invested in HD? Turn on the TV, It's All Over the News and Closing Bell
If you own HD, then you need to get to a TV now. It has been mentioned in the news very frequently in the last hour.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Home Depot, Incorporated will perform just about the same as the index. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HD has been less covered in the news compared to the rest of our universe of stocks. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HD.
“… That will help HOME DEPOT and lowe's. > > as far as valuations would you be comfortable in putting new money to work in these stocks right here then? > > I would be. …”
Invested in HD? Turn on the TV, It's All Over the News and Countdown to the Closing Bell
Be aware that something important has occurred for HD and investors interested in this stock should seek out information in any way possible.
Home Depot, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; HD has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… you mentioned HOME DEPOT, and I was talking to the person that runs the stock. It ran very nicely this morning. It hasn't come back in, so apparently people feel the same way. …”
The Amount of News Coverage on Home Depot, Incorporated Places It in the Top Five Most Active Stocks
The newswires are burning up right now on Home Depot, Incorporated, so check our RazorWire or turn on your TV to see why it is so active in the news.
Our sentiment indicator, provided through the Motley Fool CAPS survey, suggests that investors are neutral overall towards HD and think that it will generally perform in-line with the S&P 500. The Ockham valuation currently has a Fairly Valued stance on HD because it trades within the price range that we would expect given current market conditions and fundamentals. When taking into account the amount of news coverage each stock normally sees as a percentage of the total, Home Depot, Incorporated has actually sunk a bit in comparison to the others.
“… Stock of the day today, we're picking HOME DEPOT. Shares of the world's largest home improvement chain getting a boost from an upgrade at morgan stanley, jumping about 2 and ... …”
Learn Why HD Is Being Discussed in the News than Almost Any Other Stock
The newswires are burning up right now on Home Depot, Incorporated, so check our RazorWire or turn on your TV to see why it is so active in the news.
Crowd sentiment is neutral from the millions of opinions submitted through Motley Fool CAPS, which suggests most investors on their platform believe Home Depot, Incorporated will perform just about the same as the index. After factoring in the current fundamentals versus their historically normal ranges, we have established a Fairly Valued stance on HD. As we analyze the results from RazorWire, one thing we do is rank each stock in terms of amount of news coverage. Recently, HD has been less covered in the news compared to the rest of our universe of stocks.
“… HOME DEPOT upgraded because of the housing market turn around. Should you be adding home improvement stocks to your portfolio? > > how about currencies. …”
Closing Bell: An Extremely Hot News Day for Home Depot, Incorporated Today
The newswires are burning up right now on Home Depot, Incorporated, so check our RazorWire or turn on your TV to see why it is so active in the news.
Home Depot, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals. We noticed recently that in comparison to all other stocks we analyze in the news; HD has received less coverage from the financial media in business television and blogs. The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral.
“… You had some nice upgrades to a bunch of dow stocks, exxon, disney and HOME DEPOT. > > some of the strength in technology' some of the drug names. …”
Volatility Alert: HD Blasting Across the Newswire on Power Lunch
Be aware that something important has occurred for HD and investors interested in this stock should seek out information in any way possible.
The Motley Fool CAPS crowd believes this stock will perform generally in line with the benchmark, or in other words the crowd is neutral. We noticed recently that in comparison to all other stocks we analyze in the news; HD has received less coverage from the financial media in business television and blogs. Home Depot, Incorporated receives our Fairly Valued rating in our latest report because the current price does not seem out of line with the fundamentals.
“… Take a look at cvs caremark, home HOME DEPOT gets an upgrade. Cit naming john thain as its new ceo. > > two years ago wall street pumped $90 million to the democrats. …”