Home Depot investors face risks

Article Excerpt

HOME DEPOT INC. $274 is a hold. The retailer (New York symbol HD; Consumer Sector; Shares outstanding: 1.1 billion; Market cap: $301.4 billion; Dividend yield: 2.2%; Takeover Target Rating: Medium; www.homedepot.com) operates 2,295 warehouse-style home-improvement stores, mainly in the U.S., Canada and Mexico. The company has now re-acquired HD Supply Holdings Inc. (Nasdaq symbol HDS) for $56 a share (or a total of $8.7 billion). That firm is a leading distributor of tools and other products to industrial users. Home Depot once owned HD Supply. It sold this business in 2007 to a group of private equity firms for $8.4 billion. The group later took HD Supply public in 2013 at $18 a share. HD Supply strengthens the company’s maintenance, repairs and operations businesses. That huge market is worth about $55 billion annually. However, Home Depot’s remaining retail operations face strong competition from discount retailers Walmart and Costco. Home Depot is a hold. hold. …