12 Best Dividend Stocks For Steady Growth

9. The Home Depot, Inc. (NYSE:HD)

5-Year Average Dividend Growth: 12.67%

Consecutive Years of Dividend Growth: 14

The Home Depot, Inc. (NYSE:HD) is a Georgia-based home improvement company that sells related construction products and offers services to its consumers. During the second quarter of 2024, the long-term fundamentals driving demand for home improvement remain solid. However, elevated interest rates and increased macroeconomic uncertainty weighed on consumer demand overall, leading to reduced spending on home improvement projects. Nevertheless, the company effectively managed these challenges while maintaining strong execution.

The Home Depot, Inc. (NYSE:HD) is also impacted by high interest rates due to its dependence on the housing market. Over the past two years, elevated interest rates have dampened the housing market, resulting in fewer people buying existing homes or undertaking major renovations, as these activities have become less affordable. In the second quarter of 2024, the company reported revenue of over $43 billion, which showed a modest growth of 0.6% from the same period last year.

Polen Capital also highlighted this interest rate sensitivity in its Q2 2024 investor letter. Here is what the firm has to say:

“In the second quarter, the top relative contributors to the Portfolio’s performance were all names we do not hold: The Home Depot, Inc. (NYSE:HD), Meta Platforms, and AbbVie. With Home Depot, much of the quarter’s weakness came in April, as a higher-than-expected inflation reading caused investors to question the likelihood of imminent rate cuts in 2024. Given Home Depot’s sensitivity to interest rates, as it relates to home improvement projects, the stock sold off in the period.”

That said, The Home Depot, Inc. (NYSE:HD) the company is expected to recover since consumer behavior tends to follow cyclical patterns. Stocks that benefit from economic upturns are often in the midst of a significant long-term growth trend. In addition, the company’s cash position is strong. In the most recent quarter, it reported an operating cash flow of nearly $11 billion.

The Home Depot, Inc. (NYSE:HD), one of the best dividend stocks, currently pays a quarterly dividend of $2.25 per share. The company has been rewarding shareholders with growing dividends for the past 14 years and has raised its payouts at an annual average rate of 12.67% over the past five years. As of August 23, the stock has a dividend yield of 2.40%.

The Home Depot, Inc. (NYSE:HD) was a popular stock among elite funds during Q2 2024, as 86 funds were bullish on the company, growing from 70 in the preceding quarter, according to Insider Monkey’s database. The stakes held by these hedge funds are collectively worth over $6 billion. Among these hedge funds, Fisher Asset Management was the company’s leading stakeholder in Q2.