Critical Review: Home Depot, Inc. (The) (HD) versus Lumber Liquidators Holdings (LL)
Home Depot, Inc. (The) (NYSE: HD) and Lumber Liquidators Holdings (NYSE:LL) are both retail/wholesale companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, valuation, risk, dividends and analyst recommendations.
Earnings & Valuation
This table compares Home Depot, Inc. (The) and Lumber Liquidators Holdings’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Home Depot, Inc. (The)||$95.72 billion||1.83||$15.69 billion||$6.68||21.95|
|Lumber Liquidators Holdings||$975.46 million||0.72||-$37.56 million||($2.26)||-10.90|
Home Depot, Inc. (The) has higher revenue and earnings than Lumber Liquidators Holdings. Lumber Liquidators Holdings is trading at a lower price-to-earnings ratio than Home Depot, Inc. (The), indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for Home Depot, Inc. (The) and Lumber Liquidators Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Home Depot, Inc. (The)||1||6||17||0||2.67|
|Lumber Liquidators Holdings||0||6||4||0||2.40|
Home Depot, Inc. (The) presently has a consensus target price of $164.03, indicating a potential upside of 11.85%. Lumber Liquidators Holdings has a consensus target price of $18.14, indicating a potential downside of 26.34%. Given Home Depot, Inc. (The)’s stronger consensus rating and higher possible upside, equities analysts plainly believe Home Depot, Inc. (The) is more favorable than Lumber Liquidators Holdings.
Home Depot, Inc. (The) pays an annual dividend of $3.56 per share and has a dividend yield of 2.4%. Lumber Liquidators Holdings does not pay a dividend. Home Depot, Inc. (The) pays out 53.3% of its earnings in the form of a dividend. Lumber Liquidators Holdings has raised its dividend for 4 consecutive years.
Institutional & Insider Ownership
71.6% of Home Depot, Inc. (The) shares are owned by institutional investors. Comparatively, 74.7% of Lumber Liquidators Holdings shares are owned by institutional investors. 0.3% of Home Depot, Inc. (The) shares are owned by company insiders. Comparatively, 4.0% of Lumber Liquidators Holdings shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Home Depot, Inc. (The) and Lumber Liquidators Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Home Depot, Inc. (The)||8.53%||158.80%||18.49%|
|Lumber Liquidators Holdings||-6.41%||-18.93%||-8.76%|
Risk & Volatility
Home Depot, Inc. (The) has a beta of 1.09, indicating that its stock price is 9% more volatile than the S&P 500. Comparatively, Lumber Liquidators Holdings has a beta of 2.21, indicating that its stock price is 121% more volatile than the S&P 500.
Home Depot, Inc. (The) beats Lumber Liquidators Holdings on 11 of the 16 factors compared between the two stocks.
About Home Depot, Inc. (The)
The Home Depot, Inc. (The Home Depot) is a home improvement retailer. The Company sells an assortment of building materials, home improvement products, and lawn and garden products, and provides various services. The Home Depot stores serves three primary customer groups: do-it-yourself (DIY) customers, do-it-for-me (DIFM) customers and professional customers. Its DIY customers are home owners purchasing products and completing their own projects and installations. The Company assists these customers with specific product and installation questions both in its stores and through online resources and other media designed to provide product and project knowledge. Its DIFM customers are home owners purchasing materials themselves and hiring third parties to complete the project or installation. Professional Customers are primarily professional renovators/remodelers, general contractors, repairmen, installers, small business owners and tradesmen.
About Lumber Liquidators Holdings
Lumber Liquidators Holdings, Inc. is a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The Company offers hardwood species, engineered hardwood, laminate and resilient vinyl flooring direct to the consumer. Its product categories include Solid and Engineered Hardwood; Laminate; Bamboo, Cork, Vinyl Plank and Other, Moldings and Accessories, and Non-Merchandise Services. It features the renewable flooring products, bamboo and cork, and provides a selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives and flooring tools. It operates in a holding company structure with Lumber Liquidators Holdings, Inc. serving as its parent company and certain direct and indirect subsidiaries, including Lumber Liquidators, Inc., Lumber Liquidators Services, LLC, Lumber Liquidators Production, LLC, and Lumber Liquidators Canada ULC, conducting its operations.
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