For most dividend investors, a 2% yield may simply not be enough to get excited enough to invest, especially for those who are approaching retirement and are relying on dividend distributions as a primary source of income in the next decade or so.
That being said, The Home Depot Inc. (NYSE:HD) is one of the few companies out there which offers a small but meaningful dividend alongside impressive fundamentals and a growth profile which makes most investors and analysts salivate.
Home Depot's current valuation is relatively meager, given the capital investment the company is making in its online presence, a move which I believe will allow the company to continue to raise dividends over the long-term, and likely at a higher rate than in the past, as the firm enjoys increased cash flows and a durable competitive advantage which is likely to widen.
In the bricks and mortar home repair space, Home Depot has built a very nice moat around itself, choosing to focus simultaneously on profitability and profitability-funded innovation - two things which excite most fundamentally-oriented long term investors such as myself.
The company's proposed $1.2-billion capital expenditure budget in supply chain and e-commerce improvements has made this company a must-buy, in my opinion, for investors looking for those companies which are able to embrace the changing landscape of retail and evolve their supply chain and logistics to support these changes.
The company's dividend, combined with its growth profile and future cash flow streams, make Home Depot a screaming buy for every investors.
Invest wisely, my friends.
