What Is the Home Depot Stock Dividend?

A dividend is a portion of a company’s profits paid out to shareholders, typically on a quarterly basis. The Home Depot stock dividend has been a reliable source of passive income for investors, reflecting the company’s strong financial performance and commitment to returning value to shareholders. As of May 2025, Home Depot has paid dividends for 149 consecutive quarters, a testament to its stability and investor-friendly approach.

In its most recent announcement, Home Depot declared a quarterly dividend of $2.25 per share, which translates to an annual dividend of $9.00 per share. This dividend is paid to shareholders of record on a specified date each quarter, offering a steady income stream for those holding the stock. For example, if you own 100 shares of Home Depot, you’d receive $225 per quarter, or $900 annually, assuming the dividend remains consistent.

Why Home Depot’s Dividend Matters to Investors?

Investors in the USA are drawn to dividend-paying stocks like Home Depot for several reasons:

1. Reliable Income Stream: Dividends provide regular cash flow, which is especially appealing for retirees or those building passive income portfolios.
2. Dividend Growth: Home Depot has a history of increasing its dividend over time, making it attractive for long-term investors.
3. Stability: As a leading home improvement retailer, Home Depot’s business model is resilient, even in challenging economic conditions.
4. Hedge Against Inflation: Dividend growth can help offset the impact of inflation, preserving purchasing power over time.

The company’s ability to maintain and grow its dividend is tied to its strong financial performance, even in the face of economic headwinds like tariffs and a sluggish housing market.

Recent Performance and Dividend 

In its first-quarter earnings report for 2025, Home Depot posted mixed results, with revenue climbing 9.4% year-over-year to $39.86 billion, surpassing Wall Street’s expectations of $39.29 billion. However, net earnings per share fell 3% to $3.56, missing the expected $3.59. Despite this earnings miss, Home Depot’s stock rose 2.5% on the day of the report, reflecting investor confidence in the company’s ability to navigate challenges like the Trump administration’s tariffs.

Home Depot reiterated its full-year sales growth forecast of approximately 2.8%, with comparable store sales in the U.S. up by 0.2%. This resilience is notable given the tariff pressures affecting the retail sector. Unlike competitors like Walmart, which warned of price hikes due to tariffs, Home Depot has committed to maintaining stable prices by working with suppliers and diversifying its sourcing. This strategy could help preserve customer demand and support its dividend sustainability.

Factors Influencing Home Depot’s Dividend

Several factors play a role in Home Depot’s ability to maintain and grow its dividend:

1. Economic Conditions: The home improvement sector is closely tied to the housing market. High mortgage rates and elevated home prices have led consumers to delay large renovation projects, impacting Home Depot’s sales. However, the company reported that customers are still spending on smaller projects, which has helped drive revenue growth.

2. Tariff Impacts: The Trump administration’s tariffs have created uncertainty for retailers, with companies like Walmart warning of price increases. Home Depot, however, is better positioned to manage these costs due to its strong supplier relationships and a professional (Pro) business segment that accounts for 50% of its revenue, compared to Lowe’s, which has greater exposure to tariff-affected goods. By diversifying its supply chain and avoiding price hikes, Home Depot aims to maintain its competitive edge.

3. Consumer Spending Trends: With consumers being more selective about discretionary spending, Home Depot has seen softer demand for big-ticket items. Analysts note that tariff uncertainty could further dampen spending on high-cost projects, but Home Depot’s focus on smaller, affordable projects has helped offset this trend.

4. Financial Health: Home Depot’s strong balance sheet supports its dividend payments. The company’s ability to generate consistent cash flow allows it to fund dividends while investing in growth initiatives, such as expanding its Pro business and improving its supply chain.

Dividend Yield and Comparison to Competitors

The dividend yield is a key metric for investors, calculated by dividing the annual dividend per share by the stock price. At a share price of approximately $377.97 (as of May 2025), Home Depot’s annual dividend of $9.00 per share yields about 2.38%.

Compared to its rival Lowe’s (NYSE: LOW), which offers a slightly lower dividend yield, Home Depot’s yield is competitive within the home improvement sector. While the S&P 500 average dividend yield is around 1.3%, Home Depot’s higher yield makes it an attractive option for income-focused investors. However, investors should note that the stock’s year-to-date performance is down 2.5%, compared to a 1% gain for the S&P 500, reflecting challenges in the broader market.

Why Invest in Home Depot Stock for Dividends?

Investing in Home Depot stock for its dividend offers several advantages:

1. Consistent Dividend Growth: Home Depot has increased its dividend annually for decades, signaling confidence in its long-term growth.
2. Resilient Business Model: The company’s focus on both DIY customers and professional contractors provides a diversified revenue stream.
3. Tariff Mitigation Strategies: Unlike some competitors, Home Depot’s proactive approach to managing tariff costs helps protect its margins and dividend stability.
4. Strong Brand Loyalty: As a leading retailer, Home Depot benefits from a loyal customer base, which supports steady sales.

However, there are risks to consider. A prolonged slowdown in the housing market or increased tariff pressures could strain earnings, potentially impacting future dividend growth. Additionally, Home Depot’s stock price may face volatility due to broader market reactions to trade policies and economic data.

How to Invest in Home Depot Stock

Investing in Home Depot stock is straightforward for U.S. investors:

1. Open a Brokerage Account: Use platforms like Fidelity, Charles Schwab, or Robinhood to buy shares.
2. Research the Stock: Review Home Depot’s financials, dividend history, and market conditions.
3. Purchase Shares: Decide how many shares to buy based on your budget and investment goals.
4. Monitor Dividends: Enroll in a dividend reinvestment plan (DRIP) to automatically reinvest dividends into additional shares, compounding your returns over time.

Latest Insights on Home Depot’s Dividend Strategy

As of May 20, 2025, Home Depot’s management remains optimistic about its dividend outlook despite tariff-related challenges. The company’s Chief Financial Officer, Richard McPhail, emphasized its commitment to maintaining current pricing levels by leveraging supplier partnerships and operational efficiencies. This approach contrasts with competitors like Stanley Black & Decker, which raised prices due to tariffs, and Walmart, which warned of potential price hikes.

Analysts from UBS and JPMorgan are cautiously optimistic about Home Depot’s stock, citing stable demand and potential for improvement if the housing market recovers. The company’s focus on smaller projects and its Pro business segment positions it well to weather economic uncertainty, supporting its ability to sustain dividend payments.

Conclusion

The Home Depot stock dividend is a compelling option for U.S. investors seeking reliable income and long-term growth. With a quarterly dividend of $2.25 per share and a yield of approximately 2.38%, Home Depot offers a competitive return compared to the broader market. Its ability to navigate challenges like tariffs, maintain stable prices, and focus on smaller projects demonstrates its resilience in a tough economic environment. While risks like a weak housing market and tariff uncertainty persist, Home Depot’s strong financials and strategic initiatives make it a solid choice for dividend investors.

By staying informed about Home Depot’s performance and broader market trends, investors can make confident decisions about including this stock in their portfolios. Whether you’re a retiree seeking income or a long-term investor looking for growth, Home Depot’s dividend is worth considering.

Top 5 Most Searched FAQs About Home Depot Stock Dividend