Home improvement giant Home Depot (HD) is a lot more than what co-founder Arthur Blank does, but it certainly has some reflection on the company he helped start. His recent financial moves are drawing some attention, and only some of it is negative. The moves overall, meanwhile, mean little to shareholders. Those shareholders sent Home Depot shares up around 1.5% in Monday afternoon’s trading.
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The whole kerfuffle started when a picture of Arthur Blank’s yacht, valued somewhere around $200 million, started making the rounds on Reddit (RDDT). Naturally, this engendered a lot of ill will, as Redditors detailed how the “…working poor…get poorer each day while the rich get even unfathomably richer while making the planet uninhabitable after the next 50-100 years.”
And, from there, it descended into a shouting match about Home Depot workers being unable to afford “baby milk,” and complaints about “climate inequality,” where the wealthiest 1% create about 16% of global carbon emissions by Oxfam reckoning. The fact that yachting allows users to beat certain taxes like capital gains, VAT, and even property taxes in some cases—if you live aboard a boat, there really isn’t much in the way of property taxes in many places—did not help matters.
But Then There’s This
However, the Arthur M. Blank family foundation is also slated to give out $50 million to several colleges in Atlanta. Four “historically black colleges” will be in line for these donations, which will be paid out over the next 10 years. These colleges include Morehouse, Morris Brown, Spelman and Clark Atlanta University.
While this is certainly a generous move, it is easy to see how the $200 million superyacht might not exactly be offset by a total of $5 million a year to four different colleges over the next 10 years. And though perception is always subjective, there are potential Home Depot customers—not to mention investors—here who may not like what they see for themselves.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 19 Buys and six Holds assigned in the past three months, as indicated by the graphic below. After a 9.55% loss in its share price over the past year, the average HD price target of $446.30 per share implies 17.04% upside potential.
