Home Depot's P/B Ratio

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Stock Performance Home Depot’s P/B ratio has averaged 12.4 since 2012. A low of 5.2 in 2012 has risen to a high of 22.4 which is the current TTM. LOW’s P/B ratio has averaged 5.4 since 2012. It also had its low in 2012 with a ratio of 2.8. The peak since 2012 was reached with the TTM’s ratio of 8.4. The SPX has averaged 2.5 since 2012. As can be seen, HD and LOW have significantly higher P/B ratios than SPX. Home Depot’s higher P/B ratio signifies the company is more overvalued than LOW. Home Depot is seen as an average rise P/B ratio since 2014. The High P/B ratio is a sign that a business has healthier future projections then past performance. Price per share can be high relative to book value because investors have to bid up the share …show more content…

With that said, LOW’s P/B ratio has risen, but not as significantly as Home Depot. This tells you that LOW’s performance is not as impressive as Home Depot, albeit, significantly better than the SPX average. LOW’s P/B ratio signifies less investor confidence. A low of 1.3 in 2012 has risen to a high of 1.65 which is the current TTM. LOW’s P/S ratio has averaged 1.08 since 2012. It also had its low in 2012 with a ratio of 0.8. The peak since 2012 was reached in 2015 with a ratio of 1.3. LOW’s current TTM is 1.2. The SPX has averaged 1.65 since 2012. As can be seen, Home Depot current P/S Ratio is slightly higher than the SPX. On the other hand, LOW’s is lower than Home Depot. Home Depot’s higher P/S ratio means that investors will pay more for every dollar of sales that Home Depot generates. As of the most current P/S ratio, investors will pay $1.60 for every dollar that Home Depot generates in sales. LOW’s current P/S ratio of 1.2 means investors will pay $1.20 for every dollar that LOW generates in sales. This indicates that LOW would be the best value in regards to the P/S ratio. LOW’s ratio has slightly fallen from 2014 to TTM, therefore further spreading the gap between Home Depot and LOW. Home Depot has

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