Home Depot Yields More Than 3x the S&P 500. Here’s the Effect on a $10,000 Investment.
Home Depot (HD +0.35%) hasn’t been on the winning team. Its shares are down 29% in the past 12 months (as of Sept. 24), and they currently trade 32% off their peak from December 2024. Macro headwinds have seriously pressured the company’s growth, harming investor sentiment.
However, the retail stock pays a healthy dividend that currently yields 3.19%. This can satisfy income investors, and it’s more than triple the 1.05% yield that the S&P 500 index pays.
Here’s the effect of that yield on a $10,000 investment.
Image source: The Motley Fool.
If you simply buy an S&P 500 exchange-traded fund, that hypothetical $10,000 capital outlay would generate $105 in annualized income. Investors who are after a passive income stream aren’t lining up to add the benchmark to their portfolios.
Home Depot is the better choice in this regard. That same $10,000 invested in shares of the leading home improvement company would result in $319 in yearly income. That’s significantly more than what the S&P 500 index would bring in.
Today’s Change
(0.35%) $1.02
Current Price
$293.20
Key Data Points
Market Cap
Day’s Range
$291.40 – $297.14
52wk Range
$289.10 – $410.94
Volume
6M
Avg Vol
4.1M
Gross Margin
31.22%
Dividend Yield
3.17%
The massive retailer’s payout has also grown. In the past decade, Home Depot has increased its quarterly dividend by 238%.
The consistency is even more impressive, however. The business has paid a dividend in 158 straight quarters. Home Depot’s ability to return capital to shareholders through various economic scenarios is a wonderful trait.
Neil Patel 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.
