15 Best Stocks For Dividends

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

Number of Hedge Fund Holders: 70

The Home Depot, Inc. (NYSE:HD) is an American home improvement company that specializes in related products and services. Analysts are currently bullish on the stock because of a more favorable interest rate environment and increased sales of existing homes, which are boosting growth in the home improvement sector. This positive sentiment is also driven by favorable industry trends and strong sales comparisons specific to the company, contributing to an upward trajectory in its share price as the company expands its market presence. In June, DA Davidson upgraded the stock to Buy and maintained a $395 price target on the stock. The stock has gained over 13% in the past 12 months.

That said, despite favorable industry trends, The Home Depot, Inc. (NYSE:HD) could face challenges due to its dependence on the overall housing market’s performance. Elevated interest rates over the past two years have slowed the housing market. Fewer people are buying existing homes and undertaking major renovations because it has become less affordable. In the first quarter of 2024, the company reported a 2.3% YoY decline in its revenue at $36.4 billion. Comparable sales for the quarter also fell by 2.8% from the same period last year.

Despite the current challenges in the home industry, The Home Depot, Inc. (NYSE:HD) maintains a competitive edge due to its market-leading position. In 2023, the company generated $153 billion in sales, significantly higher than its competitor Lowe’s, which reported $86.3 billion in revenue. With over 40 years in the business, The Home Depot, Inc. (NYSE:HD) benefits from economies of scale, allowing it to pass some savings on to customers and retain the rest, resulting in healthy profit margins. Even with weak sales, the company’s gross margin improved in the latest quarter, rising to 34.1% from 33.7% the previous year.

The Home Depot, Inc. (NYSE:HD) currently pays a quarterly dividend of $2.25 per share for a dividend yield of 2.51%, as of July 15. The company has raised its payouts for 14 years in a row, which makes HD one of the best stocks for dividends. In the most recent quarter, the company distributed $2.2 billion to shareholders through dividends.

Of the 920 hedge funds tracked by Insider Monkey at the end of Q1 2024, 70 funds held stakes in The Home Depot, Inc. (NYSE:HD), the same as in the previous quarter. These stakes have a total value of more than $5.5 billion. With nearly 9 million shares, Ken Fisher’s Fisher Asset Management was the company’s leading stakeholder in Q1.