Home Depot is the largest home improvement retailer and the fourth largest retailer by revenue. With a market cap of around $308 billion, it employs roughly 500,000 people and runs about 2,300 stores internationally.
Its stock has also been a consistent performer for shareholders, as an increased interest in home improvement during and after the pandemic helped give the stock a 60% bump in the past five years.
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No doubt many long-term Home Depot shareholders are happy investors, and on Tuesday they were just given even more reason to rejoice.
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Home Depot Hikes Its Dividend
On a call with analysts during its Q4 earnings report on Feb. 21, the company announced it would increase its already handsome dividend by another 10%.
"Today our Board approved a 10% increase in our quarterly dividend to $2.09 per share, which equates to annual dividend of $8.36 per share," CEO Edward Decker said on the call, adding, "we believe that the long-term underpinnings of our market remain strong, and we are well positioned to leverage our distinct competitive advantages to capitalize on compelling growth opportunities in our space."
While Home Depot may not be a dividend aristocrat, or a stock that's increased its dividend every year for the past 25 years (it paused raises during the 2008 recession), it has paid one for the past 35 years, or about 141 quarters. Not too shabby.
Looking Closer at Home Depot's Financials
Home Depot's financials put the retailer in a strong place, if not to grow, then to weather what could be a dampened economy in 2023. The company is highly dependent on supply chains running smoothly; it sells raw goods and materials like lumber -- which were highly constrained during the last year or so. Despite those constraints, which predictably cut into the bottom line, Home Depot ended the quarter and 2022 strong.
"In the fourth quarter, total sales were $35.8 billion, an increase of approximately $100 million or 0.3% from last year," CFO Richard McPhail said. "During the fourth quarter, our total company comps were essentially flat at negative 0.3% for the quarter. As [executive VP of merchandising] Jeff mentioned, lumber prices in the quarter negatively impacted comp sales by approximately 70 basis points...For the year, our sales totaled a record $157.4 billion, with sales growth of $6.2 billion or 4.1%, versus fiscal 2021. For the year, total company comp sales increased 3.1%, and US comp sales increased 2.9%. In the fourth quarter, our gross margin was approximately 33.3%, an increase of 7 basis points from last year. For the year, our gross margin was approximately 33.5%, a decrease of 10 basis points from last year."
Those record sales are being put back into the business, to the celebration of many investors.
"During the year, we paid approximately $7.8 billion of dividends to our shareholders," McPhail continued. "We look to grow our dividend every year as we grow earnings, and as [CEO] Ted mentioned today, we announced our Board of Directors increased our quarterly dividend by 10% to $2.09 per share which equates to an annual dividend of $8.36 per share."
Despite the cheery dividend news, Home Depot's stock is down 5.4% as of this writing.
