Dividend Stock Portfolio: 8 Stocks To Invest In According to Reddit

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

Number of Hedge Fund Holders: 86

The Home Depot, Inc. (NYSE:HD) is an American multinational home improvement company that offers a wide range of related tools, construction products, and appliances. In the second quarter of 2024, the long-term factors supporting demand for home improvement stayed strong. However, growing macroeconomic uncertainty negatively impacted overall consumer demand, resulting in lower spending on home improvement projects. Despite these challenges, the company managed to navigate them effectively while ensuring strong performance.

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.”

The Home Depot, Inc. (NYSE:HD) is popular among Redditors because of its strong dividend history. Over the past 5 years, the company has raised its payouts at an annual average rate of 12%. Moreover, it holds a 14-year streak of consistent dividend growth, which makes it one of the best stocks for a dividend stock portfolio. The stock supports a dividend yield of 2.31%, as of September 21.

The Home Depot, Inc. (NYSE:HD) is underperforming the broader market this year but the company is expected to rebound as consumer behavior typically follows cyclical trends. Companies that thrive during economic recoveries are often part of a substantial long-term growth trajectory. Furthermore, the company’s cash position remains robust, with nearly $11 billion in operating cash flow reported for the most recent quarter.

The Home Depot, Inc. (NYSE:HD) was a popular buy among elite money managers during the second quarter of 2024. As per Insider Monkey’s database of Q2 2024, 86 hedge funds held stakes in the company, growing from 70 in the previous quarter. These stakes have a total value of over $6 billion.