Down 18%, Home Depot Stocks Purchase on DIP?

The housing market is still under pressure, which leads to more interest in housing improvement projects.
The Home Depot model has a natural hedge, because even in these times, people have to do small projects to improve the home.
The company has diversified its base suppliers to increase its lever.
10 shares we like better than Home Depot ›

Is a giant to improve home Home (Nyse: HD) Stock Purchase on DIP? If you are looking for a high value stock, Home Depot shares look priced to buy today.

The market is moving right north of Flat for the year and has an orientable trust in the economy. Many tariff problems have been developed so far and US companies have been demonstrating resilience. However, this is fragile. Since interest rates are still high and the real estate market is still low, many companies specifically related to the home market are still under pressure.

Home Depot reports moderate efficiency and does not expect this to abandon until the conditions remain as they are currently. Home Depot shares are at 18% discount of all time, and investors need to look.

The mortgage rates are still high, and the real estate market is still stagnant. According to Redfin Data, housing prices increased in May as housing sales fell 6% compared to last year. The average of the 30-year-old 30-year fixed death is 6.8%, slightly lower than last year, but is still increased.

This is most harmful to Home Depot’s business because people invest in renovating new homes, whether large projects or small ones. They are trying to avoid investing in old homes they plan to leave. However, the flip side is that if they stay in their older homes, they have no choice but to fix them to make them housing or comfortable. This provides a natural hedge against negative market forces. This is confirmed in the latest results that show that customers are shopping small projects while placing large reconstructed detention workplaces.

Image source: Home Depot.

Home Depot is the biggest retail chain to improve housing in the world and has a healthy network of Omnichannel, serving individuals and pluses. The huge and diverse business means that there are many levers to generate engagement and sales.

In all circumstances, Home Depot acts in a great industry because it always needs it. The management said that the housing stock aged, with 55% of the US homes being at least 40 years old. They are the largest asset of homeowners and these houses need work.

In the first quarter of 2025 (ended on May 4), sales increased by 9.4%, but comparable sales (comparisons) were approximately equal to the year. Action profit (EPS) decreased from $ 3.63 last year to $ 3.45 this year, and the results were in line with expectations. For the whole year, management has managed a modest growth of sales and components and a modest reduction in EPS.

Executive Director Ted Decker noted that the company was well prepared for whatever happened with the tariffs. Half of his goods are already coming from the United States and she diversified his supply chain in the last few years. This effort continues and he expects that no country will be responsible for more than 10% of its deliveries in a year. Due to its scale and diversification, it is nimble and has pricing power.

Home Depot has the opportunity for $ 1 trillion, which has recently been expanding by acquisition of Pro supplier SRS distribution. He opened 13 stores through Q1, which contributed to its excellent sales growth. Although there are already more than 2,300 stores in the United States, Canada and Mexico, it still has opportunities to expand.

Home Depot is an action of the highest value that pays an attractive dividend. The dividend gives 2.6% and it has increased by 290% in the last 10 years.

At the current price, it trades with a price-profile ratio (P/e) of 24. This is not super cheap, but it is around recent average values. This is what the market thinks Home Depot is worth it because it is reliable for strength and passive income and is likely to return to growth mode in better circumstances.

If you are looking for shares of the highest value to buy on DIP, Home Depot is an excellent option.

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Jennifer Sibil has no position in any of the mentioned shares. Motley Fool has positions and recommends Home Depot. Motley Fool recommends Redfin. Motley Fool has a policy of disclosure.

Down 18%, Home Depot Stocks Purchase on DIP? Originally published by Motley Fool

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