Here's How Much a $1000 Investment in Home Depot Made 10 Years Ago Would Be Worth Today

How much a stock's price changes over time is a significant driver for most investors. Not only can price performance impact your portfolio, but it can help you compare investment results across sectors and industries as well.

The fear of missing out, or FOMO, also plays a factor in investing, especially with particular tech giants, as well as popular consumer-facing stocks.

What if you'd invested in Home Depot (HD) ten years ago? It may not have been easy to hold on to HD for all that time, but if you did, how much would your investment be worth today?

Home Depot's Business In-Depth

With that in mind, let's take a look at Home Depot's main business drivers.

Based on net sales, The Home Depot Inc. is the world’s largest home improvement specialty retailer with 2,317 retail stores across the globe as of the end of fiscal 2021. It offers a diverse range of branded and proprietary home improvement items, building materials, lawn and garden products, décor products and related services.

With the help of its stores, the company operates throughout the United States (including Puerto Rico and the territories of the Virgin Islands and Guam), Canada and Mexico and employs more than 500,000 associates. The company’s average store area is almost 104,000 square feet with approximately 24,000 square feet of additional outside garden area. It also functions through a network of distribution and fulfillment centers, as well as a number of e-commerce websites.

The company typically serves three primary customer groups: Do-It-Yourself (DIY), Do-It-For-Me (DIFM), and Professional Customers.

DIY Customers: These customers are usually homeowners, who prefer purchasing products and completing installations on their own. The company engages these customers in various platforms to provide product and project knowledge.

DIFM Customers: These customers are usually homeowners, who purchase products on their own and employ third-parties to complete the projects and installations. The company offers a variety of installation services in sores, online, or in their homes through in-home consultations for DIFM customers.

Professional Customers: This customer segment mostly comprises professional remodelers, general contractors, repairmen, small business owners, and tradesmen. These customers build, renovate, remodel, repair and maintain residential properties, multifamily properties, hospitality properties and commercial facilities.

Bottom Line

While anyone can invest, building a lucrative investment portfolio takes research, patience, and a little bit of risk. If you had invested in Home Depot ten years ago, you're probably feeling pretty good about your investment today.

According to our calculations, a $1000 investment made in October 2012 would be worth $4,622.39, or a 362.24% gain, as of October 25, 2022. Investors should keep in mind that this return excludes dividends but includes price appreciation.

In comparison, the S&P 500 gained 169.55% and the price of gold went up -7.45% over the same time frame.

Analysts are anticipating more upside for HD.

Home Depot boasts a robust surprise trend, which continued in second-quarter fiscal 2022. The company reported ninth straight quarter of earnings and sales beat in the fiscal second quarter. Results gained from gained from strong demand for home-improvement projects, robust housing market trends and ongoing investments. The company also benefited from continued strength in both Pro and DIY categories as well as digital momentum. Its interconnected retail strategy and underlying technology infrastructure have helped consistently boost web traffic for the past few quarters, aiding digital sales. However, shares of the company declined in the past year. The company reported soft gross margin in the fiscal second quarter driven by higher supply chain investments. Higher inventory levels and interest expense also remain concerning.

Shares have gained 6.26% over the past four weeks and there have been 3 higher earnings estimate revisions for fiscal 2022 compared to none lower. The consensus estimate has moved up as well.
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