Back then, when fractional share buying was not available through most brokers, the price per share mattered a lot more compared to today, when most investors can buy fractions of a share easily. Between 19, the company split its stock 13 times:Įssentially, the company has split its shares every one and a half years or so during the 1980s and 1990s, a time during which Home Depot experienced rapid earnings growth and strong share price gains.
Home Depot has, in fact, had quite a range of stock splits in the past, although none in recent years. Strong results in 2020 made for a difficult comparison, which is why earnings growth in 2021 will not be too strong, which is why revenue growth has slowed down in Q2, which may explain why shares have started to consolidate at current levels. Home Depot has delivered attractive gains of more than 20% so far this year, but in recent months, shares have mostly moved sideways. This is a little less than the upside that analysts forecast for Lowe's, which has about 10% left before hitting the consensus price target. Analysts see an upside potential of around 5% throughout the next twelve months, as the target price for Home Depot stands at $345 right now. Home Depot has delivered a 10-year return of 900%, before dividends, and its 5-year return of more than 140% (before dividends) is pretty strong as well.Īt $328, shares are currently offering a dividend yield of exactly 2.0%, while Home Depot's earnings multiple stands at 22.5 based on earnings per share estimates for the current year. Through strong execution, capital allocation, and thanks to business models that are not overly vulnerable versus online competitors, these companies thrived over the last couple of years. Home Depot belongs to the group of strong retailers, together with its peer Lowe's ( LOW ) and a couple of others, such as Dollar General ( DG ). Not all brick-and-mortar companies are created equal, however, and some of them did vastly outperform their peers. And that is not entirely false, as Amazon ( AMZN ) and other online retailers did indeed wreak havoc on some traditional retailers, be it Blockbuster or Sears. Home Depot Stock Priceīrick-and-mortar retail has been called "dead" for years, even before the pandemic. Investors shouldn't buy or sell based on that alone, as Home Depot's underlying business growth and its dividends and valuation are more important. Home Depot has been identified by some as a stock split candidate, and when we look at the company's history, that might indeed make sense.
Shares are a little expensive, but due to the company's quality, an investment may still make sense at current prices. In 2020, the company had its best year ever, and 2021 is looking quite solid as well. Home Depot ( NYSE: HD) is one of the best brick-and-mortar retailers in the world, delivering attractive profit growth, share price gains, and dividends for decades. Romanista/iStock Editorial via Getty Images Thesis
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