TMHC vs HD

For growth investors, The Home Depot, Inc.

(HD) is the stronger pick with 3. 2% revenue growth year-over-year, versus -0. 6% for Taylor Morrison Home Corporation (TMHC). Taylor Morrison Home Corporation (TMHC) offers the better valuation at 7. 8x trailing P/E (11. 4x forward), making it the more compelling value choice. Analysts rate Taylor Morrison Home Corporation (TMHC) a "Buy" — based on 30 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, Taylor Morrison Home Corporation (TMHC) is the cheapest at 7.

8x versus The Home Depot, Inc. at 22. 7x. On forward P/E, Taylor Morrison Home Corporation is actually cheaper at 11. 4x. The PEG ratio (P/E divided by earnings growth rate) is the most growth-adjusted single valuation metric: Taylor Morrison Home Corporation wins at 0. 35x versus The Home Depot, Inc. 's 6. 02x — a PEG below 1. 0 traditionally signals the market is underpricing earnings growth.

Over the past 5 years, Taylor Morrison Home Corporation (TMHC) delivered a total return of +94.

4%, compared to +8. 0% for The Home Depot, Inc. (HD). Over 10 years, the gap is even starker: TMHC returned +338. 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 Taylor Morrison Home Corporation's 0. 92β — meaning TMHC is approximately 10% more volatile than HD relative to the S&P 500. On balance sheet safety, Taylor Morrison Home Corporation (TMHC) carries a lower debt/equity ratio of 37% versus 148% for The Home Depot, Inc. — giving it more financial flexibility in a downturn.

By revenue growth (latest reported year), The Home Depot, Inc.

(HD) is pulling ahead at 3. 2% versus -0. 6% for Taylor Morrison Home Corporation (TMHC). On earnings-per-share growth, the picture is similar: The Home Depot, Inc. grew EPS -4. 6% year-over-year, compared to -6. 0% for Taylor Morrison Home Corporation. Over a 3-year CAGR, HD leads at 1. 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.

Taylor Morrison Home Corporation (TMHC) is the more profitable company, earning 9.

6% net margin versus 8. 6% for The Home Depot, Inc. — meaning it keeps 9. 6% of every revenue dollar as bottom-line profit. Operating margin tells a similar story: TMHC leads at 14. 0% versus 12. 7% for HD. 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, Taylor Morrison Home Corporation (TMHC) is the more undervalued stock at a PEG of 0. 35x versus The Home Depot, Inc. 's 6. 02x. A PEG below 1. 0 is traditionally considered the threshold for growth-adjusted undervaluation. On forward earnings alone, Taylor Morrison Home Corporation (TMHC) trades at 11. 4x forward P/E versus 21. 5x for The Home Depot, Inc. — 10. 1x cheaper on a one-year earnings basis. Analyst consensus price targets imply the most upside for HD: 26. 3% to $408. 08.

In this comparison, HD (2.

8% yield) pays a dividend. TMHC does not pay a meaningful dividend and should not be held primarily for income.

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%, TMHC: +338. 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.

Both stocks operate in the Consumer Cyclical sector, making this a peer-level intra-sector comparison — the same macro tailwinds and headwinds will affect both.

In terms of investment character: TMHC is a small-cap deep-value stock; HD is a large-cap quality compounder stock. HD pays a dividend while TMHC does not, making them suitable for different income and tax situations. 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.