Home Depot Near 52-Week Lows: Why A 3.2% Yield Makes Me Look Twice

Summary Home Depot is moderately undervalued, trading at 19.5x EPS guidance with a 3.19% yield, despite a 28.7% stock decline over the past year. HD's Pro strategy, delivery speed, and AI investments are driving share gains and compounding earnings even in a frozen housing market. Q2 results showed 5.7% revenue growth, 5.1% adjusted EPS growth, and 33.9% FCF growth, with debt repayment prioritized over buybacks. My base case targets $18.50 EPS in three years, supporting ~10% annualized returns including dividends, making HD a patient, multi-year buy. Nico De Pasquale Photography/DigitalVision via Getty Images Being long Home Depot ( HD ) this past year has been a grind, and the price chart does not hide it. The stock closed at $292.18 on September 24th, off 28.7% over the past year and only $3.08 This article was written by Steven Fiorillo 43.04K Followers Follow I am focused on growth and dividend income. My personal strategy revolves around setting myself up for an easy retirement by creating a portfolio which focuses on compounding dividend income and growth. Dividends are an intricate part of my strategy as I have structured my portfolio to have monthly dividend income which grows through dividend reinvestment and yearly increases. Feel free to reach out to me on Seeking Alpha Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. Disclaimer: I am not an investment advisor or professional. This article is my own personal opinion and is not meant to be a recommendation of the purchase or sale of stock. The investments and strategies discussed within this article are solely my personal opinions and commentary on the subject. This article has been written for research and educational purposes only. Anything written in this article does not take into account the reader’s particular investment objectives, financial situation, needs, or personal circumstances and is not intended to be specific to you. Investors should conduct their own research before investing to see if the companies discussed in this article fit into their portfolio parameters. Just because something may be an enticing investment for me or someone else, it may not be the correct investment for you. Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.