Home Depot (HD) has raised its annual dividend for 17 consecutive years, maintaining the streak through the COVID-19 recession, the 2022 downturn and the Fed's aggressive rate hikes. A $10,000 investment made 17 years ago would have grown to $121,000 and now pays about $3,300 in annual dividends, while a $10,000 investment today at the 2.73% forward yield would pay about $273 a year. Comparable sales and margins have declined since fiscal 2021, and fiscal 2026 guidance calls for 0%–2% comp growth, a 12.8%–13% adjusted operating margin and 0%–4% adjusted EPS growth. Over the past 12 months, Home Depot paid out 61% of free cash flow and 65% of EPS as dividends, and at $332 per share the stock trades at 22 times this year's earnings. The author says a weak housing market and macro headwinds could limit near-term gains, but considers it a reliable blue chip dividend stock for long-term investors.
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