Home Depot Offers Investors 2.2% Dividend Yield, 20%-Plus One-Year Total Return (HD)
By: Ned Piplovic,
Home Depot, Inc (NYSE:HD) offers currently a 2.2% dividend yield, nine consecutive years of annual dividend hikes and has missed hiking its annual dividend only twice in the past two decades
In addition to the steadily rising annual dividends, the company also provided its shareholders with robust asset appreciation over the past five years. The combined benefit of rising dividends and growing share prices continues to reward the company’s shareholders with double-digit percentage growth rates over the past one and three years. Over the past five years, the shareholders received an even more handsome reward in terms of a total return that exceeds 160%.
Any investors looking to incorporate Home Depot’s share into their portfolio that targets long term capital growth and steady dividend income should take a position prior to the company’s May 30, 2018, ex-dividend date. Doing so, will ensure that these investors do not miss the next round of dividend distributions, which is approaching quickly and will occur on the company’s upcoming June 14, 2018, pay date.
Home Depot, Inc (NYSE:HD)
Based in Atlanta, Georgia, and founded in 1978, Home Depot, Inc. operates as a home improvement retailer. The company’s stores offer various building materials, as well as home improvement, lawn and garden and home décor products. Additionally, Home Depot offers tool and equipment rental, home maintenance and professional service programs to do-it-yourself and professional customers. The company also offers installation programs that include flooring, cabinets, countertops, water heaters and sheds. Furthermore, Home Depot offers professional installation in various categories sold through its in-home sales programs, such as roofing, siding, windows, cabinet refacing, furnaces and central air systems, as well as acts as a contractor to provide installation services to its customers through third-party installers. As of March 2018, the company operated almost 2,300 stores in North America, including nearly 2,200 stores in the United States, Puerto Rico, Guam and the U.S. Virgin Islands, approximately 120 stores in Mexico and nearly 200 stores in Canada.
Over the past two decades, Home Depot has failed to hike its annual dividend only twice. Since failing to increase its annual dividends in 2008 and 2009, the company has delivered nine consecutive annual dividend boosts and advanced its total annual dividend amount nearly 360%, which corresponds to an average growth rate of 18.4% per year since 2009.
The current quarterly dividend payout of $1.03 is 15.7% higher than the $0.89 payout from the same period last year. This current quarterly amount converts to a $4.12 annualized dividend distribution for 2018 and a 2.2% dividend yield. The current yield is more than 16% higher than Home Depot’s own 1.9% five-year average yield and 12% higher than the $1.97 average yield of the overall Services sector. Additionally, the company’s current yield is also 16% higher than the 1.9% current dividend yield of Lowe’s (NYSE:LOW). Lowe’s and Home Depot are currently the only two publicly-traded national home improvement retailers in the United states.
Over the first 60 days of the trailing 12-month period, the share price pulled back 7.3% and reached its 52-week low of $144.58 on July 24, 2017. After that minor correction, the share price resumed its rising trend and ascended more than 43% before reaching its 52-week high price of $207.23 on January 26, 2018.
After peaking in late January, the share price declined more than 17% by the end of March 2018 on overall market volatility. However, since the end of March 2018, the share price recovered more than half of its losses since the January peak and closed on May 21, 2018, at $189.79. That closing price was nearly 22% higher than it was 12 months earlier, 31.3% higher than the 52-week low from July 2017 and more than 140% above its price level five years ago.
Over the trailing 12 months, the company’s recent investors enjoyed a 23.4% total return on their investment. However, the longer-term investors received total returns of nearly 73% over the past three years and more than 160% over the past five years.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.