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The Home DepotXSWX:HD -0.32%85 Forward Rate of Return (Yacktman) % is 6.18% as of Apr. 2026, which is 64% below its 10-year median of 17.18. GuruFocus rates XSWX:HD with a GF Score™ of 85/100 and a GF Value™ of CHF309.52. The stock has 3 warning signs investors should review. Among 796 Retail - Cyclical companies, The Home Depot ranks worse than 63.82% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. The Home Depot's forward rate of return for was 6.18%.
The historical rank and industry rank for The Home Depot's Forward Rate of Return (Yacktman) % or its related term are showing as below:
XSWX:HD'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: 5.82 Med: 17.18 Max: 23.57
Current: 6.14
During the past 13 years, The Home Depot's highest Forward Rate of Return was 23.57. The lowest was 5.82. And the median was 17.18.
XSWX:HD's Forward Rate of Return (Yacktman) % is ranked worse than 63.82% of 796
companies
in the Retail - Cyclical industry
Industry Median: 12.58
vs XSWX:HD: 6.14
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
The Home Depot (XSWX:HD) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
The Home Depot Forward Rate of Return (Yacktman) % Related Terms
The Home Depot Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for The Home Depot's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
The Home Depot Forward Rate of Return (Yacktman) % Chart
XSWX:HD vs LOW, FND, HVT: Forward Rate of Return (Yacktman) % Comparison
For the Home Improvement Retail subindustry, The Home Depot's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
The Home Depot Forward Rate of Return (Yacktman) % vs Retail - Cyclical Industry
For the Retail - Cyclical industry and Consumer Cyclical sector, The Home Depot's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where The Home Depot's Forward Rate of Return (Yacktman) % falls into.
The Home Depot Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 6.18% mean?
The Home Depot (XSWX:HD) has a Forward Rate of Return (Yacktman) % of 6.18% as of Apr. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on The Home Depot and its competitors. This is 64% below median its historical median of 17.18. Over the past decade, The Home Depot's Forward Rate of Return (Yacktman) % has ranged from 5.82 to 23.57. According to the industry distribution chart, The Home Depot ranks #508 out of 796 companies in the Retail - Cyclical industry, placing it in the top 63.8%.
Is The Home Depot's Forward Rate of Return (Yacktman) % too high?
The Home Depot's current Forward Rate of Return (Yacktman) % of 6.18% is 64% below median its 10-year median of 17.18. Over the past 10 years, this metric has ranged from a low of 5.82 to a high of 23.57. The Retail - Cyclical industry median Forward Rate of Return (Yacktman) % is 12.58. The Home Depot's value of 6.18% is 50.9% below this industry median. Based on the distribution chart, The Home Depot ranks #508 out of 796 companies in the Retail - Cyclical industry, which is below the industry midpoint. Overall, The Home Depot has a GF Score™ of 85/100, reflecting its overall financial health beyond just this single metric.
How does The Home Depot's Forward Rate of Return (Yacktman) % compare to LOW and FND?
According to the Retail - Cyclical industry distribution chart, The Home Depot ranks #508 out of 796 companies for Forward Rate of Return (Yacktman) %. This places The Home Depot in the lower half of its industry. The industry median Forward Rate of Return (Yacktman) % is 12.58. The Home Depot's value of 6.18% is 50.9% below this benchmark. Historically, The Home Depot's own Forward Rate of Return (Yacktman) % has ranged from 5.82 to 23.57 over the past decade. While the company's 10-year median is 17.18 vs. the industry median of 12.58, The Home Depot has consistently been below the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for a Retail - Cyclical company?
The median Forward Rate of Return (Yacktman) % among Retail - Cyclical companies is 12.58, based on 796 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. The Home Depot's current Forward Rate of Return (Yacktman) % of 6.18% is 50.9% below the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on The Home Depot and its competitors. For the Retail - Cyclical industry, the median Forward Rate of Return (Yacktman) % is 12.58 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. The Home Depot's current Forward Rate of Return (Yacktman) % is 6.18%, which is 64% below median its own 10-year median of 17.18. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is The Home Depot stock overvalued right now?
The Home Depot (XSWX:HD) has a current Forward Rate of Return (Yacktman) % of 6.18%. The stock's GF Value™ is CHF309.52, compared to a current price of CHF268.55 — trading 13.2% below its estimated fair value. The current Forward Rate of Return (Yacktman) % is 6.18%, which is 64% below median its 10-year median of 17.18 and 50.9% below the Retail - Cyclical industry median of 12.58. The Home Depot's overall GF Score™ is 85/100 with 3 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For The Home Depot (XSWX:HD), the current Forward Rate of Return (Yacktman) % is 6.18% as of Apr. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is The Home Depot (XSWX:HD) Overvalued in 2026?
Based on GuruFocus' analysis, The Home Depot stock appears to be undervalued.
The current stock price of CHF268.55 is trading 13.2% below its estimated GF Value™ of CHF309.52.
Key valuation signals for XSWX:HD:
Forward Rate of Return (Yacktman) %: 6.18% (64% below median its 10-year median of 17.18)
GF Value™: CHF309.52 vs. price of CHF268.55 (13.2% below fair value)
Industry Position: 50.9% below the Retail - Cyclical median (#508 of 796)
No single metric tells the full story. See the XSWX:HD stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Home Depot is the world's largest home improvement specialty retailer, operating 2,361 warehouse-format stores offering more than 30,000 products in store and 1 million products online in the US, Canada, and Mexico. Its stores offer building materials, home improvement products, lawn and garden products, and decor products and provide various services, including home improvement installation services and tool and equipment rentals. The acquisition of Interline Brands in 2015 allowed Home Depot to enter the MRO business, which has been expanded through the tie-up with HD Supply (2020). The 2024 tie-up with SRS will help grow professional demand in roofing, pool, and landscaping projects, while the 2025 purchase of GMS will lift building product sales through 1,250 distribution locations.
85GF Score
Get the complete analysis for XSWX:HD
Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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