Home Depot’s Stock Performance, Dividends: Shareholder Must-Knows

Home Depot Reports Fiscal 1Q17 Results: Why Did It Do So Well?

(Continued from Prior Part)

Home Depot’s stock falls after earnings release

Despite the sales and earnings beats, Home Depot (HD) stock fell 2.5% to $132 when the Market closed on May 17, 2016, the day the company declared its fiscal 1Q17 results. Rival home improvement retailer (XRT) Lowe’s (LOW), which declared its first quarter earnings on May 18, 2016, fell 1.2% to $76.07. Williams-Sonoma (WSM) fell 1.7%, and Restoration Hardware (RH) fell 0.94%.

However, Bed Bath & Beyond (BBBY), Pier 1 Imports (PIR), and Wayfair (W) rose that day by 0.47%, 1.9%, and 2.6%, respectively.

Historical stock performance

Home Depot and Lowe’s have risen 0.36% and 0.81%, respectively, year-to-date. Both companies have also been consistent dividend payers over the years. Home Depot is expected to pay its shareholders a quarterly dividend of $0.69 in fiscal 2017, which is 17% more than last fiscal year. This is the company’s seventh consecutive year of dividend increases. It paid 43% of its earnings as dividends last fiscal year and plans to take the payout ratio to 50% over the longer term. HD was trading at a forward dividend yield of 2.1% as of May 17, 2016.

In contrast, dividend aristocrat Lowe’s (LOW) paid out 38.9% of its earnings as dividends last fiscal year and grew its dividend per share ~23% to $1.07. LOW is trading at a forward dividend yield of 1.5%. This compares to 2.8% for WSM, 1.2% for BBBY, and 5.2% for PIR. Wayfair and Restoration Hardware don’t pay dividends.

Browse this series on Market Realist:

• Part 1 - Honing In on Home Depot’s Performance in Fiscal 1Q17

• Part 2 - What Drove Home Depot’s 9% Sales Growth in Fiscal 1Q17?

• Part 3 - What Factors Could Boost Home Depot’s Omnichannel Sales?