3 Reasons to Love Home Depot Stock (HD)

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As I mentioned on my Facebook (FB) page earlier this week, dividend stocks are dominating this year … to the point that they’ve been responsible for 40% of total stock returns. While there are lots of great dividend stocks to choose from, one of my personal favorites so far this year is Home Depot (HD).

Home Depot Stock Home Depot EarningsHD stock in more than doubling the market in 2015 alone and more than quadrupling the market if we zoom out to the past 12 months. Translation: shares of Home Depot have put a whopping 40% return in the pockets of investors over the last year … not even considering the dividend as a cherry on top.

Let’s take a look at three reasons why Home Depot is one of my favorite in the world of dividend stocks right now.

3 Reasons to Love HD

The payout: Home Depot has been rewarding shareholders since the 1980s, and thanks to its consistent payout bumps, HD is definitely one of the leading dividend stocks out there for investors.

Right now, the quarterly dividend of 59 cents per share yields 2.1%. HD stock’s current yield also represents a 25% increase over last year’s quarterly payout amount and continues a solid streak of bumps.

Home Depot stockholders have seen that dividend jacked up every year since the Great Recession.

The business: Home Depot earnings come with a lot to like as well. HD stock beat expectations on the top and bottom lines in the most recent quarter and upped its full-year guidance.

Home Depot expects to earn between $5.24 and $5.27 per share — up from previous guidance of $5.11 to $5.17 per share — and better than the analyst community’s consensus of $5.23.

Perhaps the most impressive figure in the report, though, was a boost of over 7% for U.S. same-store sales, which marked the third consecutive quarter with an increase.

The mega-trend: These strong earnings numbers aren’t flukes; they’re proof that broader economic trends are pulling in Home Depot stock’s favor.

HD is riding not just the housing rebound (as you likely remember, housing starts last month increased at a pace not seen since before the recession) but is also riding the e-commerce mega-trend and improving online sales.

Bottom Line

To wrap it all up, consider this: Home Depot stock is trading at just 19 times forward earnings — not too shabby considering that comes with 14% long-term growth estimates and a consistently rising quarterly payout.

Once again, Home Depot’s dividend currently yields just north of 2%, but if you hold onto it long enough and HD continues its pattern of jacking up the payout, your yield on cost is going to look even better … while you continue to pocket some nice stock gains.

If you’re in the market for more dividend stocks, give Home Depot a browse.

Hilary Kramer is the editor of GameChangers, Breakout Stocks Under $10, High Octane Trader, Absolute Capital Return and Value Authority. She is an accomplished investment specialist and market strategist with more than 25 years of experience in portfolio management, equity research, trading, and risk management. She has extensive expertise in global financial management, asset allocation, investment banking and private equity ventures, and is regularly sought after to provide her analysis on Bloomberg, CNBC, Fox Business Network, and other media.

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Article printed from InvestorPlace Media, https://investorplace.com/2015/06/home-depot-hd-stock-housing/.

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