The Home Depot, Inc. (HD) vs Exxon Mobil Corporation (XOM)
Rewards
- ★The Home Depot, Inc. has maintained ROIC above 15% for 4 consecutive years, indicating a durable competitive advantage.
- ★The Home Depot, Inc. scores 87/100 on the Economic Moat Score (Wide Moat), with margin stability as the strongest competitive dimension.
- ★Dividend yield of 2.84% with a consistent or growing payout over the past 4 years.
- ★Each dollar of retained earnings has created $1.06 of market value — management is creating shareholder value.
- ★Altman Z-Score of 4.16 indicates very low bankruptcy risk — the company is firmly in the safe zone.
Risks
- ⚠FCF yield of 2.6% is below 3%, meaning the market is pricing in substantial future growth to justify the current price.
- ⚠High leverage (5.10x debt/equity) combined with thin interest coverage (-1.0x) poses financial risk.
- ⚠Insiders have sold $2.6M worth of stock in the past 3 months — significant insider liquidation.
- ⚠ROIC has declined by 12.6 percentage points over the observed period, which may signal competitive erosion.
- ⚠Trailing P/E of 23.6x is 84% above the historical average of 12.8x — the stock trades at a premium to its own history.
- ⚠Free cash flow has declined at a 26.1% CAGR over the past 4 years — a concerning trend.
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.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation.
$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 $328?
Market pricing in significantly higher growth than history — aggressive.
What growth rate is the market pricing in at $158?
Market pricing in significantly higher growth than history — aggressive.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Margin Stability is the standout factor.
Narrow moat with reinvestment efficiency as the key competitive advantage. Improving margin stability would strengthen the moat.
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 pessimistic — investigate whether fears are temporary or structural"
"Market is optimistic — be cautious and ensure you have a margin of safety"
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.