We recently published a list of 10 Companies that Just Raised their Dividends. In this article, we are going to take a look at where The Home Depot, Inc. (NYSE:HD) stands against other companies that just raised their dividends.
Dividend stocks have been attracting investor interest for quite some time, consistently delivering strong performances that highlight their long-term appeal. This growing investor preference has led many major technology companies to introduce dividend payments. As a result, dividends are no longer limited to traditional value stocks, with growth-oriented firms also emerging as significant dividend payers.
Historical trends show that dividend-paying stocks have consistently outperformed other asset classes across various market cycles. A report from T. Rowe Price highlights that dividends have made up nearly one-third of total equity returns for US stocks since 1926. During the period from 1980 to 2019, which saw a decline in interest rates, dividends contributed to 75% of the broader market’s overall returns.
READ ALSO: 12 Best Consumer Cyclical Dividend Stocks To Buy Right Now
By the end of September 2024, approximately 80% of companies in the broader market were distributing dividends—a proportion that has remained relatively steady over the past decade. Notably, the technology sector represented nearly 24% of dividend-paying companies, a significant rise from 13% ten years ago. Other industries, such as healthcare and industrials, also experienced an uptick in firms offering dividends. This broader availability of dividend-paying stocks has provided income-focused investors with more opportunities to gain exposure to high-growth and innovative businesses. Given these developments, analysts maintain a positive outlook for dividend stocks as they head into 2025.
Dividend growth is closely tied to a strong earnings season. In February, the broader market struggled, declining by over 2% as concerns about inflation, upcoming tariffs under former President Donald Trump, and escalating geopolitical tensions weighed on investor sentiment. On February 28, the major index briefly dipped into negative territory for 2025. However, corporate earnings reports for the fourth quarter have provided a fresh catalyst for the market.
As of February 28, nearly 97% of companies in the broader market had reported earnings, with over 75% surpassing analyst expectations, according to FactSet. Many of these companies delivered encouraging news for income-focused investors. In the week ending February 25, data from JPMorgan showed that 20 companies announced dividend increases, with no reports of dividend cuts or suspensions during that period. This is positive for income investors, as dividend growth is always a welcomed development for them.
Howard Silverblatt, Senior Index Analyst at S&P Dow Jones Indices, made the following comment about the situation:
“Many companies have the ability and cash-flow to increase their dividend payments, but remain concerned over the economy, government spending and taxing policy. Given the continued economic growth with lower interest rates and the relatively low unemployment rate, a clearer picture of potential policy should emerge in the first quarter, at which time more companies can better evaluate their future commitment.”
Companies continued to raise their dividends throughout the fourth quarter of 2024. A report from S&P Dow Jones Indices noted that 635 dividend hikes were recorded during the quarter, totaling $14.2 billion. Over the 12-month period, total dividend increases reached $71.4 billion, marking an increase from $65.1 billion in the previous year.
Our Methodology
For this list, we first scanned the list of companies that raised their dividend payouts in 2025 so far. Then, we picked prominent companies with strong dividend histories and solid cash positions. From that group, we picked 10 companies with the highest number of hedge fund investors, according to Insider Monkey’s database of Q4 2024. The stocks are ranked in ascending order of their hedge fund holders.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
A home improvement store overflowing with a variety of products and supplies.
The Home Depot, Inc. (NYSE:HD)
Number of Hedge Fund Holders: 88
The Home Depot, Inc. (NYSE:HD) is a multinational home improvement company that sells related tools and products to its consumers. With a presence in more than 2,300 locations across North America, the company’s performance remains closely tied to real estate market trends. While it has sustained steady growth and strong profitability, higher mortgage rates have posed challenges. Rising borrowing costs have led to a slowdown in home sales and a tighter housing supply, which has, in turn, affected consumer spending on home improvement projects.
The Home Depot, Inc. (NYSE:HD) delivered strong fourth-quarter earnings for 2024, with revenue reaching $39.7 billion—marking a year-over-year increase of more than 14%. For fiscal 2025, the company anticipates total sales growth of approximately 2.8%, with comparable sales expected to rise by around 1% over the same 52-week period. In addition, it plans to open about 13 new stores and projects a gross margin of roughly 33.4%.
The Home Depot, Inc. (NYSE:HD) closed the quarter with over $1.65 billion in cash and cash equivalents. Throughout fiscal 2024, it generated nearly $20 billion in operating cash flow, reinforcing its strong financial position. This stability has allowed Home Depot to sustain uninterrupted dividend payments for 152 consecutive quarters. On February 25, the company hiked its dividend by 2.2% to $2.30 per share. This was the company’s 15th consecutive year of dividend growth. With a dividend yield of 2.38% as of March 6, HD is among the stocks that raised their dividends.
Overall, HD ranks 2nd on our list of companies that just raised their dividends. While we acknowledge the potential for HD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than HD but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.
