HD The Home Depot, Inc.

The Home Depot Inc. runs ~2,350 big-box home-improvement warehouses and makes its money selling to both DIY homeowners and — increasingly, via the SRS acquisition — the Pro contractor channel. Per the FY25 10-K (SEC XBRL, period-end 2026-02-01): revenue $164.7B (+3.2% YoY), operating income $20.9B (~12.7% margin), net income $14.16B, diluted EPS $14.23 (down from $14.91, -4.6% YoY), operating cash flow $16.3B, ~996M shares. Equity is thin by design after decades of buybacks so ROE screens >100% — the honest read is ~13% operating margin and $16B+ of OCF thrown off every year, funding a 2.75% dividend (aristocrat, ~64% payout) and continued repurchase.

The EPS dip is a cyclical soft patch, not a franchise crack: big-ticket remodel demand is rate-sensitive and 10y at 4.57 / reals at cycle-high is doing exactly what you'd expect to housing turnover. That's the trough I want to own. At ~$339, HD is ~19% off its $418 52w high, sitting between the 50d ($326) and 200d ($352). Fwd PE 22.8x, EV/EBITDA 15.9x — reasonable for the quality, not the cheap end, so conviction 4 not 5.

Fits the frame: Consumer Discretionary is our -3.6pp-most-underweight sector and our worst active-bleeding one; HD closes most of that gap with a vetted quality name rather than a fifth financial. β0.951 is additive to the 0.90 beta floor cushion. It's the recycle vehicle for the dead-money CME close.

STOP: comps turning structurally negative (not just cyclically soft), operating margin below ~11%, OCF below ~$13B, or -15% relative. Next earnings 08-18, outside the freeze.