The Home Depot Inc's Dividend Analysis
An In-depth Look at The Home Depot Inc's Upcoming Dividend and Its Historical Performance
The Home Depot Inc (NYSE:HD) recently announced a dividend of $2.25 per share, payable on 2024-03-21, with the ex-dividend date set for 2024-03-06. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into The Home Depot Inc's dividend performance and assess its sustainability.
What Does The Home Depot Inc Do?
This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
How to calculate the intrinsic value of a stock?
The Home Depot is the world's largest home improvement specialty retailer, operating more than 2,300 warehouse-format stores offering a vast array of products and services. With its extensive product range and strategic acquisitions, The Home Depot Inc has solidified its market leadership and expanded its offerings to cater to a wide customer base, from DIY enthusiasts to professional contractors. This diversity in products and services not only drives revenue but also supports the company's ability to maintain and grow its dividend payments to shareholders.
A Glimpse at The Home Depot Inc's Dividend History
The Home Depot Inc has upheld a commendable record of consistent dividend payments since 1987, showcasing its financial stability and commitment to returning value to shareholders. As a recognized dividend achiever, The Home Depot Inc has proven its ability to not only sustain but also increase its dividend payouts over an extended period, reflecting a strong and growing business model.
Below is a chart showing annual Dividends Per Share for tracking historical trends.
Breaking Down The Home Depot Inc's Dividend Yield and Growth
With a trailing dividend yield of 2.15% and a forward dividend yield of 2.33%, The Home Depot Inc currently signals a positive outlook for dividend growth. The company has demonstrated strong dividend growth over the past decade, with an annual growth rate of 18.90%. This impressive track record is further emphasized by The Home Depot Inc's 5-year yield on cost, which stands at approximately 4.18%, highlighting the potential long-term benefits for investors.
The Sustainability Question: Payout Ratio and Profitability
The sustainability of The Home Depot Inc's dividends can be gauged by its dividend payout ratio, currently at a comfortable 0.55. This indicates a balanced approach to distributing earnings while retaining sufficient capital for future growth. The company's exceptional profitability rank of 10 out of 10, combined with a decade-long track record of positive net income, underscores its financial health and supports the likelihood of continued dividend payments.
Growth Metrics: The Future Outlook
Robust growth metrics are crucial for the sustainability of dividends, and The Home Depot Inc's growth rank of 10 out of 10 attests to its strong growth prospects. The company's revenue per share growth rate of 7.50% per year outperforms 60.19% of global competitors, while its 3-year EPS growth rate of 8.20% per year surpasses 46.77% of global competitors. Additionally, The Home Depot Inc's 5-year EBITDA growth rate of 11.60% outperforms 57.59% of global competitors, further solidifying its growth potential.
Next Steps
In conclusion, The Home Depot Inc's upcoming dividend, consistent history of dividend growth, prudent payout ratio, and robust profitability and growth metrics paint a promising picture for value investors. The Home Depot Inc not only rewards shareholders with regular dividend payments but also demonstrates the potential for these dividends to grow over time. With a strong foundation in both financial health and market leadership, The Home Depot Inc remains an attractive option for those seeking stable and growing income streams. As investors consider their next move, they may find it worthwhile to explore other high-dividend yield opportunities through the High Dividend Yield Screener available to GuruFocus Premium users.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
