Acquisition HD

Home Depot LogoThis recent acquisition is nothing really but rebalancing the portfolio and reinvesting the funds from the sale of Baxter International Inc. (BAX) into something that is more sustainable and has a brighter dividend growth future. Therefore, I decided to go ahead and invest the proceeds into a The Home Depot Inc. (HD) for a number of reasons. As a recent homeowner, I go to HD quite often myself, especially with the recent home renovations that I have been doing. Slowly, but surely the place is coming together and I am still enjoying the home ownership and the renovation endeavors.

I believe The Home Depot Inc. (HD) as an investment has a really great business model that is geared towards the real estate market with potential upside due to the depressed overall market. I have also noticed a significant construction boom here in Chicagoland area. With this acquisition, I am continuing my diversification into businesses I use, I know, and are simple to understand.

Company Overview: The Home Depot Inc. was established in 1978 in Atlanta, GA. The company is a home improvement retailer that operates warehouses that sell a wide range of building materials, home improvement products, lawn and garden products and provide a number of professional contracting services. The company serves three primary customer groups such as the do it yourself customers, the do it for me customers and the professional contracting customers. Currently, the company operates around 2,200 stores located in the U.S. and its territories.

  • Dividend Yield: 2.2%
  • 3Yr Dividend Growth Rate: 15.1%
  • Payout Ratio: 44.7%
  • P/E: 23.5
  • Consecutive Years of Dividend Raises: 3

I purchased 8 shares for the price of $125.55 adding $22.08 to my annual dividend income.

This is the 2nd time I am initiating a stock acquisition this year. The transaction is my first ever purchase of HD into the portfolio. Also, the acquisition of HD makes it the 35th company I am invested in. Currently, HD ownership stake represents to be around 1.4% of my current portfolio value.

The 12-month dividend income increased to $2,712.

Thank you for reading & have a great day!

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4 Comments

  1. Special Agent Dividend on March 25, 2016 at 20:12

    Good buy with HD. It’s obviously a solid company that has room for growth and dividend increases. HD or Lowe’s are two I’ve considered before, so I’m sure I’ll keep an eye out for it when the time comes to pull the trigger. Thanks for sharing and have a good weekend.

    • DividendVet on March 25, 2016 at 22:44

      Believe me I know, I only wish I could have gotten a better valuation on the company. However I do believe in paying a little bit above P/E of 20 for a high quality stock as HD. The future will tell how well they will do.

      Have a great weekend to you too.

  2. Investment Hunting on March 28, 2016 at 18:59

    I like HD stock. I’m not a shareholder but I do have this stock on my watchlist. This stock tends to do well when bad weather is frequent. Since we’re in an El Nino, I assume the shares will do well in the short-term.

    • DividendVet on March 29, 2016 at 12:42

      Absolutely, hopefully you don’t get any of those bad storms cooked up over there. I always cringe when something bad happens to the neighborhood and the houses all get wiped out. On there other hand, when there is a weakness there is an opportunity, that’s why I really like HD business model. Homes are deteriorating assets that need constant maintenance, upkeep and customization. I recall a study done that said that over time, homes here in America just gotten bigger and bigger, therefore I think this industry is well positioned for longterm growth.

      All the best.

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