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Home Depot: Buy For Moderately Stable Organic, Dividend Growth

Published Mon, 23 Sep 2019 14:03:29 -0400 on Seeking Alpha

Home Depot (HD), is a buy for the dividend growth and total return growth investor and is the largest home improvement retailer for the housing sector. Home depot is a cash machine, and the company uses some of the cash to open a few new stores each year. The larger part of the cash is used to increase dividends each year and buy back shares raising the stock price. Home Depot is 9.8% of The Good Business Portfolio being my IRA portfolio of good business companies that are balanced among all styles of investing. I normally trim a position when it gets to 8% of the portfolio but am pushing HD to 10% since the fundamentals look good. At 10% of the portfolio, HD will be trimmed down to 9% of the portfolio. I have trimmed HD three times this year to the 9+% range, and I will trim it again when it is over 10% of the portfolio.

I use a set of guidelines that I codified over the last few years to review the companies in The Good Business Portfolio (my portfolio) and other companies that I am reviewing. For a complete set of the guidelines, please see my article "The Good Business Portfolio: Update to Guidelines, August 2018". These guidelines provide me with a balanced portfolio of income, defensive, total return, and growing companies that hopefully keeps me ahead of the Dow average.
When I scanned the five-year chart, Home Depot has a great chart going up and to the right for 2015- 2019 YTD in a strong solid pattern. Home Depot is fully priced but would be a worth a nibble... Read more

Stock name Last trade   P/E Earnings/Share Dividend/Share Dividend yield
OMEGA HEALTHCARE INVESTORS 41.16   32.4 1.27 2.64 6.57
JOHNSON & JOHNSON 130.43   21.6 6.03 3.80 2.93
BOEING 375.63   44.0 8.54 8.22 2.22
DANAHER 141.74   41.6 3.41 0.68 0.50