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The Home Depot

HD
45
Home Improvement · Consumer Cyclical
Price
$309.63
+1.39 (+0.45%)
Market Cap
$308.91B
Winston Score
45
Winston is serious
Mixed quality — meaningful strengths and weaknesses.
Data as of Oct 18, 2026 · filings through Aug 2, 2026

§How the score breaks down

Quality
Good
20/30
Growth
Weak
3/20
Cash Flow
Strong
8/10
Stability
Good
5/10
Valuation
Good
6/10
Ownership
Weak
1/15
Dividends
Mixed
2/5

45 of 100 counted points = Winston Score 45.

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Share count falling — buybacks

−5.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 1.06B (2022) → 997.0M (2026)

§Winston Score History

The full picture

Home Depot is the largest home improvement retailer in the world. It sells tools, lumber, appliances, paint, flooring, and thousands of other products used to build, fix, or upgrade homes. Its customers include everyday homeowners doing weekend projects and professional contractors who buy in large volumes.

The company makes money by selling products in its roughly 2,300 stores across the United States, Canada, and Mexico, plus through its website. Contractors and construction pros make up a growing share of sales, and Home Depot has invested heavily to serve that group better than competitors like Lowe's. The biggest risk the business faces is a slowdown in the housing market — when people stop buying and selling homes, they tend to spend less on renovations, which directly hurts Home Depot's sales.

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Growth Profile

When traditional metrics don't capture the full picture, these are the signals growth stock investors use instead.

Revenue Growth

+5.7% YoY

YoY Growth Rate

Slow revenue growth

EPS Growth

+4.4% YoY

YoY Growth Rate

Slow EPS growth

R&D Spend

$0/ year

0.0% of revenue

Below sector average (4%)

Research and development spending

Insider Activity

0.2%ownership

→ Flat

Insider ownership roughly steady over the past year

Cash Position

Cash flow positive

$2.1B cash & investments

Quarterly Free Cash Flow

↑ Burn rate improving

Company generates more cash than it spends — no dilution risk from fundraising

Growth context

The Home Depot is growing revenue at 6% year-over-year. The Winston Score measures business quality today — these growth metrics show what could matter tomorrow.

The Winston Score above measures business quality today. Growth stocks often score lower because they invest in the future rather than maximising current profits. These metrics show what matters most for evaluating that future.

Score breakdown

Every number that matters to educated investors.

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Quality

Profit per sale
Gross Margin
33.7%
Modest — 33.7% gross margin
Profit after running costs
Operating Margin
14.3%
Healthy — 14.3% operating margin
Return on the money invested
ROCE
32.4%
Exceptional — 32.4% return on capital

ROIC above 25%. Every dollar invested in the business earns more than 25 cents back per year.

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Growth

Sales growth
Sales YoY
+2.5%
Nearly flat sales (+2.5% YoY)
Profit growth
EPS YoY
-2.9%
Earnings shrinking (-2.9% YoY)

Slight earnings drop. Typical near a cyclical low.

How steady the profit is
EPS Consistency
2/8 quarters
Earnings rarely grow — volatile business

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Cash Flow

Profit that turns into cash
Cash Conversion
132%
Turns 132% of profit into real cash
Spare cash per sale
FCF Margin
8.9%
Modest free cash flow (8.9%)

FCF margin between 0% and 10%. Some cash from sales, but not a lot.

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Stability

What it owes vs what it owns
Debt / Equity
2.90
Heavy debt load (2.90)
Covers its interest
Interest Cover
8.70x
Comfortably covers interest (8.7x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

Price vs profit
P/E Ratio (TTM)
21.6x
Growth-priced — P/E 21.6

P/E above the market average. People are paying up for expected growth.

Cheaper or dearer next year
P/E vs Forward
+4.8
GROWING
Earnings expected to grow meaningfully — cheaper on forward P/E (21.6 → 16.8)

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Dividends

Dividend
Dividend Yield
3.21%
Moderate income — 3.21% yield

Standard yield zone for stable dividend payers. A meaningful piece of total return.

Dividend record
Dividend Growth
+1.5%
Dividend flat
Payout Ratio
65%
no trend
Most of the profit goes out as dividends. Little left to reinvest, and less cushion if earnings dip.

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