Home Depot Stock Looks Poised to Bounce Back in 2019

Home Depot (NYSE:HD) stock was up marginally in late morning trading on January 11. Shares have climbed 4.2% in January so far. This comes after a difficult 2018 which saw the stock fall to 52-week lows in late December. Shares are still down 6% year over year.

In the third quarter Home Depot increased its sales outlook for fiscal 2018 to 7.2% growth – up from 7% earlier in the year. The devastating storm season in 2018 hurt Home Depot’s business in key areas, and the company says that this will continue to weigh on results this year. However, customer transactions were still up 1.4% year-over-year in Q3.

Retail sales were up 5% year-over-year this past holiday season according to payment processors. This is promising for Home Depot as we await its fourth-quarter results. In the third quarter earnings per share beat expectations and rose to $2.51 while revenue slightly overperformed coming in at $26.3 billion. Rising confidence in the US housing market has also benefitted Home Depot. There are concerns that further rate tightening could put even more pressure on housing in 2019.

Home Depot stock last boasted an RSI of 58 as of close on January 10. This indicates that shares are in neutral territory as we look ahead to mid-January. Home Depot last paid out a quarterly dividend of $1.03 per share which represents a 2.3% yield. Fears of a slowdown in housing should not steer investors away from Home Depot in early 2019, especially as the US Fed signals a dovish turn.

Home Depot is an attractive pick up today with a solid dividend as a boon for investors seeking a bit of income.