1 Incredible Reason to Buy Home Depot Stock Before It Reports Earnings on Aug. 18
Key Points
Home Depot reports Aug. 18, with Wall Street expecting modest revenue and earnings growth.
The best reason to buy the stock now is a roughly $700 billion Pro opportunity that's already gaining traction.
Following the recent dip, the stock offers an attractive 2.6% dividend yield.
Home Depot (NYSE: HD) will report second-quarter earnings on Aug. 18. Analysts expect revenue of $47.2 billion, up about 4% from the year-ago quarter. Adjusted earnings per share are projected at $4.73, slightly higher than last year's $4.68.
One compelling reason to buy the stock now is Home Depot's roughly $700 billion opportunity in the Pro market -- and it's already translating into results.
Missed Nvidia in 2009? This Rare Signal Is Flashing Again. In 2009, a "Double Down" signal flashed for a little-known chipmaker called Nvidia. For the first time in years, that same "Total Conviction" signal is flashing for a company 1/100th the size of Nvidia. Continue »
Image source: The Motley Fool.
Home Depot is building a hard-to-replicate business serving professional contractors, positioning it for meaningful growth when the housing market recovers.
The company acquired Mingledorff's, expanding Home Depot's reach in heating, ventilation, and air conditioning (HVAC) equipment. It can unlock substantial value from the deal through its SRS distribution network, which includes more than 1,300 branches.
That Pro exposure could become a major growth engine as the housing market turns the corner. Early signs are encouraging; in the first quarter, Pro posted better comparable sales than do-it-yourself customers.
Meanwhile, Home Depot's core business remained resilient despite a weak operating environment. First-quarter sales rose 4.8% year over year. With the stock recently pulling back and the dividend yield above average at 2.6%, investors may have an attractive entry point to buy shares before improving sales trends send the stock higher.
John Ballard has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy.