HD vs MRK: Which Is the Better Buy?
Side-by-side comparison of The Home Depot, Inc. and Merck & Co., Inc. — fair value, conviction, valuation metrics, and QuantHub research signals.
Updated 2026-04-11.
The Home Depot, Inc. · Consumer Cyclical
$337.34
+12.1% upside to fair value
Med Conviction
Grade B
VS
Merck & Co., Inc. · Healthcare
$121.42
-2.9% upside to fair value
Med Conviction
Grade B
QuantHub Verdict
HD has more upside to fair value
(+12.1%).
MRK trades at a lower forward P/E
(14.0x).
These are model outputs — not personalized investment advice.
See all research →
Valuation & Fundamentals
| Metric |
HD |
MRK |
| Current Price |
$337.34 |
$121.42 |
| Fair Value Estimate |
$378.00 |
$118.00 |
| Upside to Fair Value |
+12.1%
|
-2.9%
|
| Market Cap |
$336.0B |
$300.2B |
| Forward P/E |
23.0x
|
14.0x
|
| EV / EBITDA |
18.1x
|
11.8x
|
| Price / Sales |
2.3x
|
4.1x
|
| Price / FCF |
29.7x
|
21.4x
|
| Revenue Growth YoY |
+3.2%
|
+1.3%
|
| Gross Margin |
33.3%
|
81.5%
|
| Operating Margin |
12.7%
|
41.2%
|
| Return on Equity |
110.5%
|
34.7%
|
| Dividend Yield |
2.44% |
3.1% |
| FCF Yield |
3.37%
|
4.7%
|
| Analyst Consensus |
Buy
|
Buy
|
Investment Thesis
Home Depot remains the world's largest home improvement retailer with 2,350+ stores, dominant 52% market share, and a rapidly growing Pro contractor segment bolstered by the SRS Distribution acquisition. The stock has declined 21% from its $427 high to $337, but now trades at 2.28x P/S, near the 5-year median of 2.31x, and 26.5x P/E which is above the 5-year median of 23.5x. EPS declined 4.6% in …
Merck is a top-5 global pharmaceutical company generating $65B in annual revenue with 81.5% gross margins and 28% net margins. Keytruda, the world's best-selling drug at $31.7B (49% of pharma revenue), faces patent expiry in 2028. Merck is aggressively building replacements through M&A and pipeline launches: Winrevair ($1.4B year one), Capvaxive ($759M), and the $6.7B Terns acquisition for TERN-7…
Accumulation Zones
| Metric |
HD |
MRK |
| Zone Low |
$285.00 |
$88.00 |
| Zone High |
$320.00 |
$100.00 |
| In Buy Zone? |
No
|
No
|