Home Depot Boosts Quarterly Dividend 1.3% to $2.33, Yield Nears 2.5%
Home Depot approved a 1.3% quarterly dividend increase to $2.33 per share, lifting its annual payout to $9.32 and raising its forward yield to nearly 2.5%. Despite full-year sales of $164.7 billion and only 0.3% comparable sales growth, the retailer will defer share buybacks until early 2027.
1. Home Depot Raises Dividend
The board approved a 1.3% increase to the quarterly dividend, raising it from $2.30 to $2.33 per share. This brings the annualized payout to $9.32, supporting a forward yield of almost 2.5%.
2. Full-Year Results Show Modest Growth
Home Depot reported full-year sales of $164.7 billion, up 3.2% year-over-year, but comparable sales grew just 0.3%. Adjusted diluted EPS fell to $14.69 from $15.24 a year earlier, reflecting broader housing market headwinds.
3. Capital Allocation Strategy
Management reaffirmed a hierarchy of reinvesting in operations, funding the dividend and then deploying excess cash to share repurchases. With debt reduction ongoing, buybacks are expected to resume in the first half of 2027.
4. Implications for Lowe's Investors
As income-focused investors weigh yields, Home Depot's consistent dividend increases may pressure Lowe's to match or exceed payout growth. Diverging capital return timelines could also influence relative investor sentiment.