Paper Summary:

This paper provides a financial overview of home improvement retailers, Home Depot and Lowes. The paper discusses financial aspects such as net margin, operating margin, return on equity, sales and earnings, asset utilization ratios, liquidity ratios and debt utilization. The paper then takes a look at the stock values of each company and cites Morningstar analysts' estimates for the fair value of the two stocks.

From the Paper:

"The Home Depot was founded, according to the company website, in 1978 in Atlanta, Georgia and is currently operating more than 1,900 stores such as The Home Depot, EXPO Design Center, The Home Depot Supply and other subsidiary companies across North America. The company boasts being the world's largest home improvement retailer and defines its business as addressed to "do-it-yourself, do-it-for me and professional customers who serve the home improvement construction and building maintenance market segments". The company feels it has "revolutionized the home improvement industry by offering an unparalleled selection of products and services under one roof". The statement is not far from the truth, since 40,000 different kinds of building materials and lawn and garden products are sold in HD stores today. The company's services include free in-store clinics for honing home improvement skills, design and decorating consultation, truck and tool rental, home delivery and others. Some subsidiaries specialize in flooring, lighting, plumbing and landscape supply. Design professionals are covered by the EXPO Design Centers. The Home Depot operates in 50 U.S. states and in the District of Columbia, Puerto Rico, 10 Canadian provinces and Mexico. In addition, two sourcing offices were recently opened in China."

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