Up 20% Already…More to Come?
“Home Depot Inc Is Now a Top Pick for Dividend Investors”—that’s the title of an Income Investors article I wrote back in March. In that piece, I explained why Home Depot Inc (NYSE:HD) could be “a solid income opportunity.”
I hope you took advantage of that piece. Even though the
U.S. economy took a major hit due to the COVID-19 pandemic—and the stock market
had a major sell-off in March—Home Depot’s business has actually been firing on
all cylinders. In fact, since that article was published on March 5, HD stock
has surged 20.5%.
The best part is, the opportunity might not be over just
yet. Although Home Depot stock is now more expensive than when I last wrote
about it, its dividend growth potential remains as strong as ever.
You see, Home Depot’s founders started the business back in
1978 with the goal of building home improvement superstores larger than any of
the competitors’ facilities. And they’ve indeed accomplished that, as the
company is now known for its big-box format stores.
Operating 2,293 stores in all 50 states, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, Canada, and Mexico, Home
Depot Inc is currently one of the largest home improvement retailers in the
world.
Of course, being a brick-and-mortar retailer means the
company faces two challenges: COVID-19 and ecommerce.
The coronavirus outbreak has turned into a worldwide
pandemic; as a result of the lockdowns, sales plunged at numerous retail
businesses. At the same time, consumers have been shopping increasingly online,
and the rise of ecommerce has led to the decline of many physical retailers.
The good news is that Home Depot, Inc managed to turn those
headwinds into catalysts.
Comments
Post a Comment