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Home Depot's Stock Falls Into Oversold Territory
The latest reason to weigh down the stock was news that Home Depot is going to spend $18.3 billion to acquire SRS Distribution, which is a distributor of building products in the U.S. It offers Home Depot a way for the business to reach more professional customers. Home Depot estimates that it will increase its total addressable pro market by $50 billion.
While that's a good growth catalyst, investors are likely not thrilled with the price tag; the acquisition will be funded through a combination of debt and cash. And with interest rates not coming down just yet, the prospect of issuing debt is likely not sitting well with risk-averse investors.
In the long run, however, Home Depot still makes for an attractive long-term investment. It has a strong brand name and it's an industry leader. The stock currently trades at 22 times its trailing earnings and also pays an above-average dividend which yields 2.7%. As long as you're willing to be patient, this can be a great stock to buy, especially once rates come down.
COMTEX_451231942/2559/2024-04-22T11:13:18