FERG vs HD

For growth investors, Ferguson plc (FERG) is the stronger pick with 3.

8% revenue growth year-over-year, versus 3. 2% for The Home Depot, Inc. (HD). The Home Depot, Inc. (HD) offers the better valuation at 22. 7x trailing P/E (21. 5x forward), making it the more compelling value choice. Analysts rate Ferguson plc (FERG) a "Buy" — based on 14 analyst ratings — the highest consensus in this comparison. The "better buy" depends entirely on your goals: growth investors should weight revenue trajectory, value investors should weight P/E and PEG, and income investors should weight dividend yield and streak.

On trailing P/E, The Home Depot, Inc.

(HD) is the cheapest at 22. 7x versus Ferguson plc at 27. 1x. On forward P/E, The Home Depot, Inc. is actually cheaper at 21. 5x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Ferguson plc wins at 1. 33x versus The Home Depot, Inc. 's 6. 02x — a reasonable growth-adjusted valuation.

Over the past 5 years, Ferguson plc (FERG) delivered a total return of +104.

5%, compared to +8. 0% for The Home Depot, Inc. (HD). Over 10 years, the gap is even starker: FERG returned +382. 9% versus HD's +185. 4%. Past returns do not guarantee future results, and the stock with the higher historical return may already have its best growth priced in.

By beta (market sensitivity over 5 years), The Home Depot, Inc.

(HD) is the lower-risk stock at 0. 84β versus Ferguson plc's 1. 24β — meaning FERG is approximately 48% more volatile than HD relative to the S&P 500. On balance sheet safety, Ferguson plc (FERG) carries a lower debt/equity ratio of 102% versus 148% for The Home Depot, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), Ferguson plc (FERG) is pulling ahead at 3.

8% versus 3. 2% for The Home Depot, Inc. (HD). On earnings-per-share growth, the picture is similar: Ferguson plc grew EPS 9. 3% year-over-year, compared to -4. 6% for The Home Depot, Inc.. Over a 3-year CAGR, FERG leads at 2. 5% annualised revenue growth. Higher growth typically commands a higher valuation multiple — check whether the premium P/E or P/S is justified by the growth rate using the PEG ratio.

The Home Depot, Inc.

(HD) is the more profitable company, earning 8. 6% net margin versus 6. 0% for Ferguson plc — meaning it keeps 8. 6% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: HD leads at 12. 7% versus 8. 5% for FERG. At the gross margin level — before operating expenses — HD leads at 33. 3%, reflecting greater pricing power or product mix advantage. Stronger margins indicate durable pricing power, lower cost of revenue, or higher mix of software/services. They are one of the clearest signs of business quality.

The PEG ratio (forward P/E divided by expected earnings growth rate) is the most precise measure of undervaluation relative to growth potential.

By this metric, Ferguson plc (FERG) is the more undervalued stock at a PEG of 1. 33x versus The Home Depot, Inc. 's 6. 02x. A PEG below 1. 5 suggests fair-to-attractive pricing relative to expected growth. On forward earnings alone, The Home Depot, Inc. (HD) trades at 21. 5x forward P/E versus 22. 6x for Ferguson plc — 1. 1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for HD: 26. 3% to $408. 08.

All stocks in this comparison pay dividends.

The Home Depot, Inc. (HD) offers the highest yield at 2. 8%, versus 1. 0% for Ferguson plc (FERG).

For long-horizon retirement investors, The Home Depot, Inc.

(HD) is the stronger choice — it scores higher on the combination of lower volatility, dividend reliability, and long-term compounding (low volatility (β 0. 84), 2. 8% yield, +185. 4% 10Y return). Both have compounded well over 10 years (HD: +185. 4%, FERG: +382. 9%), confirming both are viable long-term holds — but the lower-volatility option typically results in less emotional selling during corrections. Retirement portfolios generally favour predictability over maximum returns. Consult a financial advisor before making allocation decisions.

These companies operate in different sectors (FERG (Industrials) and HD (Consumer Cyclical)), which means they face different economic cycles, regulatory environments, and macro sensitivities — making direct comparison nuanced.

These fundamental differences mean investors should not choose between them on a single metric — the "better stock" depends entirely on which of these characteristics aligns with your investment strategy.