Investors Purchase High Volume of Home Depot Call Options (NYSE:HD)

Key Points

• Home Depot experienced a 392% increase in call option purchases, totaling 129,339 contracts on a recent trading day, indicating heightened investor interest.
• The company reported Q2 earnings with an EPS of $4.68, slightly missing analyst expectations, but showed a 4.9% increase in revenue year-over-year.
• A dividend of $2.30 per share was announced to be paid on September 18th, representing an annual yield of 2.3%, with a payout ratio of 62.5%.

The Home Depot, Inc. (NYSE:HD - Get Free Report) was the recipient of some unusual options trading on Wednesday. Stock traders purchased 129,339 call options on the company. Thisrepresentsanincreaseof392% compared to the average daily volume of 26,287 call options.

Home Depot Price Performance

Shares of HD traded up $0.75 during mid-day trading on Wednesday, hitting $407.06. The company's stock had a trading volume of 3,012,103 shares, compared to its average volume of 3,541,540. The stock has a market capitalization of $405.18 billion, a price-to-earnings ratio of 27.65, a PEG ratio of 3.86 and a beta of 1.00. The company has a debt-to-equity ratio of 4.31, a current ratio of 1.15 and a quick ratio of 0.34. The firm has a 50-day moving average price of $382.33 and a 200 day moving average price of $371.08. Home Depot has a fifty-two week low of $326.31 and a fifty-two week high of $439.37.

Home Depot (NYSE:HD - Get Free Report) last released its quarterly earnings results on Tuesday, August 19th. The home improvement retailer reported $4.68 earnings per share (EPS) for the quarter, missing analysts' consensus estimates of $4.69 by ($0.01). The firm had revenue of $45.28 billion for the quarter, compared to analyst estimates of $45.43 billion. Home Depot had a net margin of 8.86% and a return on equity of 193.99%. The firm's revenue was up 4.9% compared to the same quarter last year. During the same quarter in the prior year, the firm earned $4.60 EPS. Home Depot has set its FY 2025 guidance at 14.940-14.940 EPS. On average, research analysts predict that Home Depot will post 15.13 EPS for the current fiscal year.

Home Depot Dividend Announcement

The company also recently announced a quarterly dividend, which will be paid on Thursday, September 18th. Shareholders of record on Thursday, September 4th will be given a dividend of $2.30 per share. The ex-dividend date of this dividend is Thursday, September 4th. This represents a $9.20 dividend on an annualized basis and a yield of 2.3%. Home Depot's payout ratio is currently 62.50%.

Insider Activity

In related news, CEO Edward P. Decker sold 32,897 shares of the company's stock in a transaction that occurred on Thursday, August 21st. The shares were sold at an average price of $397.22, for a total transaction of $13,067,346.34. Following the sale, the chief executive officer directly owned 122,425 shares in the company, valued at approximately $48,629,658.50. This represents a 21.18% decrease in their ownership of the stock. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is accessible through the SEC website. Also, EVP Angie Brown sold 1,000 shares of the stock in a transaction on Wednesday, August 20th. The shares were sold at an average price of $404.07, for a total transaction of $404,070.00. Following the completion of the transaction, the executive vice president directly owned 3,837 shares in the company, valued at $1,550,416.59. This trade represents a 20.67% decrease in their ownership of the stock. The disclosure for this sale can be found here. Insiders sold a total of 46,532 shares of company stock worth $18,648,987 over the last three months. Company insiders own 0.10% of the company's stock.

Institutional Investors Weigh In On Home Depot

Hedge funds and other institutional investors have recently modified their holdings of the stock. Asset Planning Services Inc. LA ADV raised its stake in Home Depot by 99,400.7% during the first quarter. Asset Planning Services Inc. LA ADV now owns 18,975,772 shares of the home improvement retailer's stock worth $6,954,431,000 after acquiring an additional 18,956,701 shares in the last quarter. Norges Bank acquired a new stake in shares of Home Depot in the 2nd quarter valued at approximately $4,885,603,000. GAMMA Investing LLC raised its stake in Home Depot by 39,194.1% during the 1st quarter. GAMMA Investing LLC now owns 10,236,903 shares of the home improvement retailer's stock worth $37,517,230,000 after buying an additional 10,210,851 shares during the period. Laurel Wealth Advisors LLC lifted its stake in Home Depot by 36,207.5% in the second quarter. Laurel Wealth Advisors LLC now owns 10,076,783 shares of the home improvement retailer's stock valued at $3,694,552,000 after buying an additional 10,049,029 shares in the last quarter. Finally, Nuveen LLC bought a new stake in shares of Home Depot in the first quarter valued at about $2,076,592,000. Institutional investors and hedge funds own 70.86% of the company's stock.

Wall Street Analysts Forecast Growth

A number of research firms have recently weighed in on HD. Royal Bank Of Canada cut their price target on Home Depot from $424.00 to $399.00 and set a "sector perform" rating for the company in a report on Thursday, May 15th. Truist Financial boosted their price objective on shares of Home Depot from $417.00 to $433.00 and gave the company a "buy" rating in a research note on Wednesday, August 13th. Guggenheim restated a "buy" rating and issued a $450.00 price target on shares of Home Depot in a report on Wednesday, May 21st. Sanford C. Bernstein restated a "market perform" rating and set a $398.00 price objective (up previously from $380.00) on shares of Home Depot in a research note on Wednesday, May 21st. Finally, DA Davidson reaffirmed a "buy" rating and set a $450.00 price target on shares of Home Depot in a report on Tuesday, August 19th. One investment analyst has rated the stock with a Strong Buy rating, nineteen have issued a Buy rating and six have given a Hold rating to the company's stock. According to MarketBeat.com, the stock presently has a consensus rating of "Moderate Buy" and a consensus target price of $432.52.

About Home Depot

The Home Depot, Inc operates as a home improvement retailer in the United States and internationally. It sells various building materials, home improvement products, lawn and garden products, and décor products, as well as facilities maintenance, repair, and operations products. The company also offers installation services for flooring, water heaters, bath, garage doors, cabinets, cabinet makeovers, countertops, sheds, furnaces and central air systems, and windows.

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