Topic: How To Invest

Pat: What’s your view on Home Depot? Is it worth holding as part of a diversified portfolio?

Article Excerpt

Home Depot Inc., $132.87, symbol HD on New York (Shares outstanding: 1.3 billion; Market cap: $170.1 billion; www.homedepot.com), operates warehouse-style home-improvement stores that average 104,000 square feet, plus an additional 24,000-square-foot garden centre. Each outlet typically carries 30,000 to 40,000 items. The company has 2,273 locations in the U.S., Canada, Mexico, Puerto Rico and Guam. In its fiscal 2016 third quarter, which ended November 1, 2015, Home Depot’s sales rose 6.4%, to $21.8 billion from $20.5 billion a year earlier. The number of transactions rose 4.4%, while the average size of each purchase increased 0.8%, to $58.03 from $57.55. Overall same-store sales improved 5.1%, while same-store sales at its U.S. locations gained 7.3%. Rising real estate values are prompting homeowners to spend more on renovations and other improvements. Home Depot is also benefiting from an increase in new construction: U.S. housing starts rose 6.5% in September 2015. Total earnings rose 12.2%, to $1.7 billion from $1.5 billion, while earnings per share gained 17.4%,…