10 Best Home Appliance Stocks to Invest In

2. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 86

The largest specialized retailer for home improvement in the world, The Home Depot, Inc. (NYSE:HD) operates more than 2,300 warehouse-format stores with over 30,000 in-store and one million online products across the US, Canada, and Mexico. Its stores sell a wide range of building supplies, equipment and tool rentals, lawn and garden products, home renovation products, and home appliance and decor items. They also offer a variety of services, such as home improvement installation services.

The world’s largest home improvement retailer had revenue of $153 billion in 2023. The company’s brand equity and economies of scale are noteworthy. The company has achieved substantial historical returns due to its extensive reach, superior operational performance, and succinct merchandising strategies, all of which continue to be fundamental elements supporting our prediction of a moderate increase in margin. With quicker delivery times enhancing the do-it-yourself (DIY) experience and delivery hubs serving professional businesses, its adaptable distribution network ought to contribute to strengthening the company’s intangible asset—its brand.

Diamond Hill Large Cap Concentrated Strategy stated the following regarding The Home Depot, Inc. (NYSE:HD) in its Q2 2024 investor letter:

“Other bottom Q2 contributors included Caterpillar and The Home Depot, Inc. (NYSE:HD). Similarly, home improvement retailer Home Depot faces growing concerns about the consumer spending environment — particularly for home improvement expenditures. However, we believe the company’s long-term prospects and multi-year fundamental outlook are unchanged.”

The company has been valued at $425 per share, up from $400 by UBS analyst Michael Lasser, who maintains a Buy rating on the company’s shares. The analyst states that Home Depot is poised for an eventual turnaround in home improvement and that the company’s Q2 2024 results were more positive than negative.

In the home improvement market, HD should be able to maintain its dominant position because of its sustained investments in merchandise and the supply chain, per Morningstar analysts.

Ken Fisher’s Fisher Asset Management is among the largest shareholders in the company, with 9,220,695 shares worth $3.174 billion.