Home improvement giant Home Depot (HD) is regarded by some investors as a good play thanks to its dividend. It pays quarterly, and has paid steadily for years, with increases coming in three times in the last two years. But can it sustain that dividend? Could its immediate rival Lowe’s (LOW) actually have a better chance? A new study suggests that Home Depot can hold that dividend longer than Lowe’s can. But investors still grew cautious, and Home Depot shares dropped nearly 3.5% in Wednesday morning’s trading.
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Home Depot’s recent dividend of $2.33 per share was the 156th consecutive dividend payout in the company’s history. That represented, reports note, a total payout of $9.15 billion. If that sounds like a lot, it should, but it turns out that Home Depot had free cash flow of $12.65 billion, which means Home Depot can readily cash that check with plenty left over for store improvements and expenses.
By way of comparison, Lowe’s saw its revenue gain 10.9% to reach $20.58 billion. But net income was actually down 11.1%, and operating margin went from 9.02% to 9.43%. This led some reports to note that the top line at Lowe’s is actually expanding faster than profit. Essentially, the report noted, Lowe’s is actually “stretched” thanks to a combination of negative equity, a cash crunch, and buybacks that have basically vanished.
A Growing Tradition
Meanwhile, Home Depot’s connection to live sports continues unabated as College GameDay Built by The Home Depot is poised to kick off its 40th season. In fact, reports note, it is about to release its 500th show on Saturday, September 5. That will actually hit on Labor Day weekend, so it is particularly special for several reasons.
The 500th show that weekend will be seen from Baton Rouge, Louisiana, where LSU will take on Clemson. This is also College GameDay‘s 15th visit to the city, reports note. College GameDay itself has won 16 Sports Emmy Awards, and currently has seven nominations for the 2026 Sports Emmy Awards show.
Is Home Depot a Good Long-Term Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on HD stock based on 17 Buys and four Holds assigned in the past three months, as indicated by the graphic below. After a 16.72% loss in its share price over the past year, the average HD price target of $417.44 per share implies 38.95% upside potential.
