Definitive Analysis
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Definitive Analysis

Financial Statements

Ticker

Industry

Sector

The Home Depot, Inc. (HD)

Company Dividend Discount ModelIndustry: Home ImprovementSector: Consumer Cyclical

Valuation Snapshot

Stable Growth$402.72 - $1,357.61$658.98
Multi-Stage$270.15 - $294.70$282.20
Blended Fair Value$470.59
Current Price$378.35
Upside24.38%
DecisionDon't Buy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2025202420232022202120202019201820172016
DPS8.43%13.44%8.988.437.847.036.495.994.734.243.423.05
YoY Growth--6.51%7.63%11.51%8.28%8.27%26.66%11.68%23.74%12.31%19.80%
Dividend Yield--2.48%2.50%2.63%2.29%1.97%2.70%2.37%2.29%2.22%2.24%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)14,582.00
(-) Cash Dividends Paid (M)9,098.00
(=) Cash Retained (M)5,484.00
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)2,916.401,822.751,093.65
Cash Retained (M)5,484.005,484.005,484.00
(-) Cash Required (M)-2,916.40-1,822.75-1,093.65
(=) Excess Retained (M)2,567.603,661.254,390.35
(/) Shares Outstanding (M)994.00994.00994.00
(=) Excess Retained per Share2.583.684.42
LTM Dividend per Share9.159.159.15
(+) Excess Retained per Share2.583.684.42
(=) Adjusted Dividend11.7412.8413.57
WACC / Discount Rate8.57%8.57%8.57%
Growth Rate5.50%6.50%7.50%
Fair Value$402.72$658.98$1,357.61
Upside / Downside6.44%74.17%258.82%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)14,582.0015,529.8316,539.2717,614.3218,759.2519,978.6020,577.96
Payout Ratio62.39%67.91%73.44%78.96%84.48%90.00%92.50%
Projected Dividends (M)9,098.0010,546.8712,145.6413,907.7015,847.5217,980.7419,034.61

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate8.57%8.57%8.57%
Growth Rate5.50%6.50%7.50%
Year 1 PV (M)9,622.739,713.949,805.15
Year 2 PV (M)10,110.4510,303.0310,497.42
Year 3 PV (M)10,562.8410,866.0611,175.03
Year 4 PV (M)10,981.4911,403.8111,838.19
Year 5 PV (M)11,367.9711,917.0412,487.13
PV of Terminal Value (M)215,880.52226,307.63237,133.81
Equity Value (M)268,526.00280,511.51292,936.74
Shares Outstanding (M)994.00994.00994.00
Fair Value$270.15$282.20$294.70
Upside / Downside-28.60%-25.41%-22.11%

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