How Home Depot Stock Could Stabilize Investor Portfolios

HD is down over 30% since the start of 2022

Sep 30, 2022 at 12:23 PM

The Home Depot, Inc. (NYSE:HD) is the world’s largest home improvement retailer with approximately 500,000 associates, 2,317 retail stores, and a market cap of about $285 billion. HD operates in the United States, Mexico, and 10 Canadian provinces, offering more than one million products for DIY customers and professional contractors. On September 28, Home Depot celebrated its 20th season of sponsoring ESPN’s “College Gameday,” now known as “College GameDay Built by The Home Depot." At last check, HD stock was seen up 0.5% at $279.79.

Home Depot stock is down about 16% over the past 12 months and has decreased 34% since peaking at an all-time high of $420.61 early last December. Additionally, HD has dropped 32% year-to-date, experiencing a 6% decline over the past month and putting the retail stock just 5% off its 52-week low of $264.51 just last week.

Moreover, Home Depot stock offers a forward price-earnings ratio of 17.09 and a price-sales ratio of 1.89, signaling a relatively fair valuation. HD also provides a solid dividend yield of 2.81% at a forward dividend $7.60.

The home improvement retailer has remained incredibly consistent over multiple years, reporting annual top and bottom line growth since fiscal 2019. In total, Home Depot has grown its annual revenues and net income 43.5% and 51.8%, respectively, since fiscal 2019. In addition, the company is estimated to report a 3.6% increase in revenues and a 6.7% increase in earnings for fiscal 2023. HD is also expected to see 2.6% revenue growth and 4.8% earnings growth for fiscal 2024. Overall, Home Depot presents a safe business model with a history of constant growth at a reasonable price, making HD a strong pick for long-term and dividend investors.

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