1 Reason I'd Buy Home Depot Stock Today and Never Sell
Key Points
Home Depot is struggling in the poor real estate market, and comparable sales are roughly flat.
Despite the challenging environment, the home improvement chain just raised its dividend again.
- 10 stocks we like better than Home Depot ›
Home Depot (NYSE: HD) may not look like the ultimate investment today. It's been struggling in the poor real estate market, and the stock has been trailing the broader market for a while. However, as an investor, you want to buy at a low, not a high. Although it can look scary, you'll ultimately come out on top, if you pick great stocks.
Home Depot could be an excellent stock to buy right now, and there's one specific reason to add it to your portfolio.
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Image source: Home Depot.
Fewer new homes mean less home improvement
Home Depot is the largest home improvement chain in the world. In general, that's a great space to be in. Housing is the No. 1 expense for Americans, accounting for more than 30% of consumer expenditures, according to the U.S. Bureau of Labor Statistics. People always need home improvement products, whether they're moving into a new home and need to spruce it up, or they aren't, and they need to fix things.
However, the real estate market is still sluggish, removing one of Home Depot's main growth drivers. According to Redfin data, housing prices continued to inch up in March, while homes sold increased as mortgage rates have been dropping.
Home Depot's comparable sales (comps) were roughly flat year over year in both the 2025 fourth quarter and the full year. Earnings per share (EPS) were slightly down, in line with expectations. Management gave a tepid outlook for 2026 of flat to 2% comps growth and flat to 4% EPS growth.
Unsurprisingly, Home Depot stock has been a bit of a laggard as these trends drag on. It's up 22% over the last three years, even as the S&P 500 has gained 80%.
The reliable dividend
Despite the company's lethargic performance, it has continued to pay and raise its dividend. It was raised only a drop this year, but that demonstrates management's commitment to the raise, which is a great signal to investors. It doesn't have the longest track record of raising the dividend; it didn't raise it between 2007 and 2009, during the mortgage crisis, although it did continue to pay it. It has increased 886% since then, and it has been paying a dividend since 1987.
At the current price, Home Depot's stock yields 2.7%. The dividend is a reliable source of growing passive income, making it an excellent forever stock. Now is a great time to buy before the market improves and Home Depot stock turns around.
Should you buy stock in Home Depot right now?
Before you buy stock in Home Depot, consider this:
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Jennifer Saibil has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy.
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