Analyzing Home Depot (NYSE:HD) & Floor & Decor (NYSE:FND)

Home Depot (NYSE:HD) and Floor & Decor (NYSE:FND) are both consumer discretionary companies, but which is the better stock? We will compare the two companies based on the strength of their risk, dividends, institutional ownership, earnings, analyst recommendations, profitability and valuation.

Analyst Ratings

This is a summary of current ratings for Home Depot and Floor & Decor, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Home Depot	1	13	18	1	2.58
Floor & Decor	5	12	4	0	1.95

Home Depot currently has a consensus price target of $375.90, indicating a potential upside of 6.82%. Floor & Decor has a consensus price target of $54.70, indicating a potential upside of 5.30%. Given Home Depot’s stronger consensus rating and higher probable upside, research analysts plainly believe Home Depot is more favorable than Floor & Decor.

Profitability

This table compares Home Depot and Floor & Decor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Home Depot	8.41%	106.42%	13.76%
Floor & Decor	5.05%	8.40%	3.68%

Valuation and Earnings

This table compares Home Depot and Floor & Decor”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Home Depot	$164.68 billion	2.13	$14.16 billion	$14.29	24.63
Floor & Decor	$4.68 billion	1.18	$208.65 million	$2.23	23.30

Home Depot has higher revenue and earnings than Floor & Decor. Floor & Decor is trading at a lower price-to-earnings ratio than Home Depot, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

70.9% of Home Depot shares are owned by institutional investors. 0.1% of Home Depot shares are owned by insiders. Comparatively, 1.8% of Floor & Decor shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Risk and Volatility

Home Depot has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Floor & Decor has a beta of 1.56, meaning that its stock price is 56% more volatile than the S&P 500.

Summary

Home Depot beats Floor & Decor on 13 of the 15 factors compared between the two stocks.

About Home Depot

The Home Depot, Inc. is a home improvement retailer serving do-it-yourself customers, professional contractors and other businesses. The company sells building materials, tools, hardware, appliances, paint, flooring, and products for home maintenance, repair and renovation, as well as lawn and garden supplies. In addition to its retail stores and online channels, Home Depot offers services such as product delivery, equipment rental and home improvement installation. The company was founded in 1978 and is headquartered in Atlanta, Georgia.

About Floor & Decor

Floor & Decor Holdings, Inc. is a specialty retailer of hard-surface flooring and related products. Its assortment includes tile, natural stone, wood, laminate and vinyl flooring, along with installation materials, tools and decorative accessories. The company serves both professional flooring contractors and homeowners through warehouse-format stores and online sales. Many stores also offer design services and product displays to help customers plan residential and commercial projects. Founded in 2000 and headquartered in Atlanta, Georgia, Floor & Decor operates stores across the United States.