Cabot Dividend Investor

03/01/2017 7:00 am EST

Focus: STOCKS

Chloe Jensen

Chief Analyst, Cabot Dividend Investor

Home Depot (HD) reported earnings that bested all expectations yesterday morning, and is now trading at all-time highs. 

Fourth-quarter EPS of $1.44 (up 23%) and revenue of $22.2 billion (up 5.8%) both beat estimates easily. Comp sales also rose 5.8%; analysts were only expecting 3.7% growth.

For the full year, revenues rose 6.9%, and comp sales rose 5.6%, also ahead of estimates. EPS of $6.45 were 18.1% higher than full-year 2015 EPS, and 1.7% above analyst estimates. 

Management is also returning more cash to shareholders; they raised Home Depot’s target dividend payout ratio from 50% to 55% and announced a 29% dividend increase and a $15 billion share buyback. 

The new quarterly dividend of $0.89 boosts HD’s yield from 1.9% to 2.5% at current prices. HD is a Buy on pullbacks for all investors.

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