12 Best Fortune 500 Dividend Stocks To Buy Right Now

5. The Home Depot, Inc. (NYSE:HD) 

Number of Hedge Fund Holders: 82

Dividend Yield: 2.31%

Market Cap: $403.4 billion

Coming in at number 5 on our list of the Best Large Cap Dividend Stocks is The Home Depot, Inc. (NYSE:HD), the largest home improvement specialty retailer in the world, engaging in the sale of building materials and home improvement products. The company boasts over 2,300 stores in the US, Canada, and Mexico.

The housing market in the US has recently been under pressure due to the rising interest rates, elevating mortgage rates, and inflationary pressures on consumers in recent years. However, the recent decline in interest rates should provide some much-needed support. The stock price of The Home Depot, Inc. (NYSE:HD) also surged by 3.38% on the 15th of January after the core Consumer Price Index (CPI) was lower than expected for December. The falling inflation is good for the economy in general and should significantly benefit Home Depot.

The home improvement industry is large and fragmented, valued at around $1 trillion annually. The Home Depot, Inc. (NYSE:HD), despite being the largest player in the sector, commands a market share of only 15%. This means that the industry behemoth still has plenty of space to take share from smaller retailers that can’t match it in brand recognition, inventory availability, or omnichannel capabilities.

Although The Home Depot, Inc. (NYSE:HD) has struggled recently largely due to macroeconomic factors, its 60% payout ratio could be attractive for investors. The company maintains a strong cash position, generating more than $15 billion in operating cash flow for the first nine months of 2024. Home Depot announced a quarterly dividend of $2.25 per share in November and has increased dividends every year since 2010.

Carillon Tower Advisers made the following comment about HD in its Q3 2024 investor letter:

“While Home Depot, Inc.’s (NYSE:HD) recent reported earnings were somewhat tepid, the market seems to be pricing in an inversion of the company’s sales, driven by lower interest rates. Home Depot reported its seventh consecutive quarter of same-store sales declines, giving back substantial gains that it enjoyed during the pandemic. High mortgage rates have also put a damper on existing home sales. People typically spend the most on home repairs and improvements in years when they buy or sell houses, often conducting both transactions in the same year.”