Abbott Laboratories (ABT) vs Home Depot, Inc. (The) (HD): Which Is the Better Buy in 2026?
As of 2026-08-03, ABT is overvalued at $106, with a DCF intrinsic value of $89 and a margin of safety of -18%. HD is undervalued at $332, with an intrinsic value of $248851992757 and a margin of safety of 100%. Of the two, HD has the wider margin of safety.
Rewards
- ★Abbott Laboratories scores 86/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
- ★Altman Z-Score of 5.60 indicates very low bankruptcy risk — the company is firmly in the safe zone.
- ★Home Depot, Inc. (The) has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★Home Depot, Inc. (The) scores 87/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
- ★Return on equity has consistently exceeded 20% over 4 years, indicating efficient use of shareholder capital.
Risks
- ⚠Trailing P/E of 34.2x is 26% above the historical average of 27.2x — the stock trades at a premium to its own history.
- ⚠PEG ratio of 2.13 indicates the stock is expensive relative to its expected growth — the market may be pricing in more growth than analysts project.
- ⚠High leverage (4.48x net debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠11 insider sales with no purchases over the past 12 months — a persistent pattern of insider selling.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →What growth rate is the market pricing in at $106?
The market implies +12.3% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +12.8%, reflecting heavy growth investment.
What growth rate is the market pricing in at $332?
The market implies -14.7% Owner Earnings growth, below historical trends — potential opportunity.
Standard FCF implies a more demanding -9.0%, reflecting heavy growth investment expected to generate future returns.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is pricing this stock without strong emotion in either direction"
"Market is pricing this stock without strong emotion in either direction"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: ABT vs HD
Is Abbott Laboratories or Home Depot, Inc. (The) more undervalued in 2026?▼
Based on our discounted cash flow model, HD trades at a 100.0% margin of safety (intrinsic value $248851992757 vs. price $332), compared to ABT's -18.2% margin of safety (intrinsic $89 vs. $106).
Which stock has a wider economic moat, Abbott Laboratories or Home Depot, Inc. (The)?▼
HD scores 87/100 (Wide moat), while ABT scores 86/100 (Wide moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Which stock has higher return on invested capital, Abbott Laboratories or Home Depot, Inc. (The)?▼
HD earns 20.2% ROIC versus ABT's 6.4%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, Abbott Laboratories's or Home Depot, Inc. (The)'s?▼
ABT's dividend earns a safety score of 84/100 (Very Safe), compared to HD's 69/100 (Safe). ABT has raised its dividend for 3 consecutive years.