Don't Buy Home Depot Stock Until You Know This 1 Key Metric
Key Points
For any retailer, there's one data point that provides a clear look at how the business is performing in any given period.
Dividend stock investors might be drawn to Home Depot's 3% yield.
- 10 stocks we like better than Home Depot ›
With 2,361 company stores and first-quarter annualized revenue of $167 billion, Home Depot (NYSE: HD) has a strong position in the home improvement market. But its shares currently trade 28% below their peak (as of June 4), which might prompt investors to want to buy the business.
But you shouldn't consider adding this retail stock to your portfolio until you know this one metric.
Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue »
Image source: The Motley Fool.
To gauge Home Depot's performance, investors must look at same-store sales, which calculates the year-over-year change in revenue from locations that have been open for at least 52 weeks. It strips away the impact new stores can have on the top line, giving a clean and consistent look at the financials.
During the fiscal 2026 first quarter (ended May 3), same-store sales grew by only 0.6%, as lower traffic was offset by higher ticket sizes. This followed a 0.3% gain in fiscal 2025 and a 1.8% decline in fiscal 2024. These aren't encouraging figures.
Given that it serves the housing market, it's no surprise that Home Depot is dealing with cyclicality amid higher mortgage rates and inflationary pressures. In an uncertain macroeconomic environment, consumers don't feel as confident spending big money on upgrades and renovations.
It's impossible to know when the economic winds will start to blow in Home Depot's favor. But the 3% dividend yield might be enough to entice income investors.
Should you buy stock in Home Depot right now?
Before you buy stock in Home Depot, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Home Depot wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $439,847!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,342,065!*
Now, it’s worth noting Stock Advisor’s total average return is 968% — a market-crushing outperformance compared to 211% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of June 6, 2026.
Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy.
Recommended Articles
