Why Home Depot Stock Could Be Special
In an era when e-commerce stocks are all the rage, who would
have thought that a company known for its big box stores would see its share
price shoot through the roof?
But it is happening: shares of Home Depot Inc (NYSE:HD) have
surged by 138% over the past five years. And that figure doesn’t include the
additional returns that shareholders have collected through the company’s
rising dividend payments.
Home Depot is the largest home improvement retailer in the
world. The company was founded in 1978 and opened its first two stores in June
1979. Today, it operates approximately 2,300 stores in all 50 U.S. states, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, all 10
Canadian provinces, and Mexico.
In its current configuration, a typical Home Depot store
averages at about 105,000 square feet of indoor retail space, which dwarfs most
of its competitors. But we know that brick-and-mortar retailers have suffered
from the rise of the e-commerce industry. So, how has Home Depot’s business
been lately?
Surprisingly well. In the company’s fiscal year 2020, which
ended January 31, 2021, it generated $132.1 billion in total sales,
representing a 19.9% increase year-over-year.
The company’s comparable sales, a critical measure of a
retailer’s performance, increased by 19.7% in fiscal 2020. Notably, its
comparable sales in the U.S. rose by 20.6%.
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