5 Home Improvement Stocks to Buy Now

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

Number of Hedge Fund Holders: 75

The Home Depot, Inc. (NYSE:HD) is an Atlanta, Georgia-based home improvement retailer in the U.S.

Home Depot, Inc. (NYSE:HD) achieved annual sales of $131 billion in 2021. Following the release of the company’s strong Q2 2022 results, Steven Forbes at Guggenheim increased the target price for The Home Depot, Inc. (NYSE:HD) from $350 to $355 and maintained a ‘Buy’ rating on HD shares. The analyst highlighted that the company’s quarterly results were relatively in-line with estimates. The results reiterated the analyst’s belief that The Home Depot, Inc. (NYSE:HD) has set control mechanisms for profit and loss performance. In the current macroeconomic environment, Forbes sees The Home Depot, Inc. (NYSE:HD) gaining market share from competitors and managing the bottom line hand-in-hand.

Following the results, the company’s Board of Directors approved a new $15 billion share buyback program on August 18. The amount is equivalent to nearly 5% of the company’s total market capitalization.

Here’s what Ensemble Capital said about The Home Depot, Inc. (NYSE:HD) in its Q1 2022 investor letter:

“Home Depot (7.7% weight in the Fund): The demand surge for remodeling and home improvement goods sparked by shelter in place orders, remote work going mainstream, and a shortage of homes on the market to buy, ran headlong into the supply chain crisis, triggering surging prices in the products Home Depot sells. But the company has been able to pass nearly all of these increased costs on to customers, with revenue growing 37% over the past two years while gross profits, or the profits the company makes on each item they sell, increased by 35%. Even this small difference appears to be due not to inflation eating away at Home Depot’s profits, but rather be a function of the huge increase in revenue the company has been generating in low margin lumber sales.”

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