Amazon-Proof Retail Stock: Home Depot
The home-improvement chain is in a good position to stand up to the world's largest online retailer.
You are now subscribed
Your newsletter sign-up was successful
Want to add more newsletters?
Delivered daily
Kiplinger Today
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.
Sent five days a week
Kiplinger A Step Ahead
Get practical help to make better financial decisions in your everyday life, from spending to savings on top deals.
Delivered daily
Kiplinger Closing Bell
Get today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.
Sent twice a week
Kiplinger Adviser Intel
Financial pros across the country share best practices and fresh tactics to preserve and grow your wealth.
Delivered weekly
Kiplinger Tax Tips
Trim your federal and state tax bills with practical tax-planning and tax-cutting strategies.
Sent twice a week
Kiplinger Retirement Tips
Your twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirement
Sent bimonthly.
Kiplinger Adviser Angle
Insights for advisers, wealth managers and other financial professionals.
Sent twice a week
Kiplinger Investing Weekly
Your twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.
Sent weekly for six weeks
Kiplinger Invest for Retirement
Your step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.
Amazon.com (symbol AMZN) is projected to account for one-half of all internet-based U.S. retail sales by 2021, according to brokerage firm Needham & Co., up from about one-third of sales in 2016. The threat to competitors in the retail space has become so dire that a "Death by Amazon” index that tracks the stock prices of 54 retailers sits near a four-year low, according to research firm Bespoke Investment Group, which compiles the index.
Yet, there are a few big retailers that are finding ways to thrive despite the Amazon onslaught. Home-improvement chain Home Depot (HD) is one of them. Here's why its stores and its stock should stand up to competition from Amazon. (Share prices, returns and other data are as of April 25.)
Selling everything from paint to countertops, Home Depot leads the market for home renovation. Amazon sells tools and other home-improvement products. But it’s not in the business of selling and shipping bulky items, such as drywall or lumber. If you want a granite countertop, you’ll probably want to see it in a showroom, such as Home Depot’s.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Nor is Amazon a player in renovation services, which Home Depot provides. About 40% of Home Depot’s sales now come from the company’s Pro Services, which offers bulk pricing, truck rentals and other benefits to professional contractors. Home Depot is expanding those services with speedier deliveries, new products and data analytics to help track and increase sales, says analyst Peter Benedict of brokerage firm Baird.
Overall sales should get a lift from other initiatives and industry trends, too. The firm is revitalizing about 500 stores to make them more customer-friendly. As retailers such as Sears (SHLD) falter, Home Depot should win some of their sales. And the company is ramping up its own online division, offering scores of products with free delivery to its stores. “While Amazon remains a persistent topic of conversation,” says Benedict, Home Depot’s business “should remain one of the more defendable in retail.”
Home Depot’s revenues hit $95 billion in the 12-month period that ended in January 2017, up from a low of $66.2 billion in its 2010 fiscal year. A housing slowdown would certainly curtail the company’s momentum. But as long as the economy and housing market keep percolating, Home Depot should be a winner.
Home Depot by the Numbers
- Share price: $153.03
- Market value: $183.8 billion
- Price-earnings ratio: 21
- Estimated 12-month profit growth: 11.3%
- Dividend yield: 2.3%
-
Betting on Super Bowl 2026? New IRS Tax Changes Could Cost YouTaxable Income When Super Bowl LX hype fades, some fans may be surprised to learn that sports betting tax rules have shifted.
-
How Much It Costs to Host a Super Bowl Party in 2026Hosting a Super Bowl party in 2026 could cost you. Here's a breakdown of food, drink and entertainment costs — plus ways to save.
-
3 Reasons to Use a 5-Year CD As You Approach RetirementA five-year CD can help you reach other milestones as you approach retirement.
-
If You'd Put $1,000 Into AMD Stock 20 Years Ago, Here's What You'd Have TodayAdvanced Micro Devices stock is soaring thanks to AI, but as a buy-and-hold bet, it's been a market laggard.
-
If You'd Put $1,000 Into UPS Stock 20 Years Ago, Here's What You'd Have TodayUnited Parcel Service stock has been a massive long-term laggard.
-
If You'd Put $1,000 Into Lowe's Stock 20 Years Ago, Here's What You'd Have TodayLowe's stock has delivered disappointing returns recently, but it's been a great holding for truly patient investors.
-
If You'd Put $1,000 Into 3M Stock 20 Years Ago, Here's What You'd Have TodayMMM stock has been a pit of despair for truly long-term shareholders.
-
If You'd Put $1,000 Into Coca-Cola Stock 20 Years Ago, Here's What You'd Have TodayEven with its reliable dividend growth and generous stock buybacks, Coca-Cola has underperformed the broad market in the long term.
-
If You Put $1,000 into Qualcomm Stock 20 Years Ago, Here's What You Would Have TodayQualcomm stock has been a big disappointment for truly long-term investors.
-
Dow Trims Its Loss to 498 Points: Stock Market TodayMarkets are wondering more and more about returns on the enormous amounts of capital hyperscalers are investing in AI.
-
If You'd Put $1,000 Into Home Depot Stock 20 Years Ago, Here's What You'd Have TodayHome Depot stock has been a buy-and-hold banger for truly long-term investors.
