Kevin O’Leary’s Stock Portfolio: 15 Stock Picks for 2025

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

Number of Hedge Fund Holders: 82

The Home Depot, Inc. (NYSE:HD) is a leading American company in the home improvement retail sector, offering a diverse range of tools, construction products, appliances, and services, including fuel and transportation rentals.

In the third quarter of 2024, The Home Depot, Inc. (NYSE:HD) reported sales of $40.2 billion, a 6.6% increase year on year. However, comparable sales fell by 1.3% during the quarter. Net earnings were $3.6 billion, or $3.67 per share, compared to $3.8 billion, or $3.81 per share, in the third quarter of 2023. Furthermore, the company has spent $649 million on common stock repurchases, compared to $6.5 billion the previous year.

Although macroeconomic factors have played a significant role in the company’s recent struggles, investors may find its 60% payout ratio appealing. With an operating cash flow of more than $15 billion in the first nine months of 2024, the company’s cash position remains strong. Furthermore, The Home Depot, Inc. (NYSE:HD) maintains its reputation by paying regular dividends, which are currently $2.25 per share quarterly, with a yield of 2.17%.

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.”