#7: Home Depot
Dividend Yield: 1.9%
Payout Ratio: 40%
YTD Performance: +44% vs. +7% for the Dow Jones Industrial Average
No one’s kicking Home Depot (NYSE:HD) out of bed for eating crackers this year. The nation’s largest home-improvement retailer has blown the cover off 2012 with 46% returns year-to-date, well outperforming the also-strong 28% gains of little brother Lowe’s (NYSE:LOW).
HD’s hot run was partially fueled by a standout second quarter in which the company saw significant improvements in earnings and same-store sales. Plus, HD now expects to report higher profits for the full fiscal year.
At less than 2%, Home Depot’s dividend isn’t anything to scream about on a yield basis. But in HD’s defense, the company has been making quarterly payouts for 25 years, and last year’s dividend increase was the company’s biggest hike since 2006. HD also is the only stock on this list with a higher-than-average payout ratio (40% on projected FY2013 earnings), but it’s not so bloated as to make future increases unlikely.
Home Depot reports third-quarter earnings Nov. 13.