12 Best Income Stocks to Buy Now

1. The Home Depot, Inc. (NYSE:HD)

Number of Hedge Fund Holders: 104

Dividend Yield as of December 28: 2.63%

The Home Depot, Inc. (NYSE:HD) is one of the best dividend stocks to invest in.

On December 17, Truist raised its price target on The Home Depot, Inc. (NYSE:HD) to $390 from $375 and kept a Buy rating. The call came as part of a broader research note looking ahead to 2026 for Hardlines and Broadlines consumer names. The analyst said some slowing trends in the second half of FY25 are likely to keep consumers selective. Shoppers are expected to stay focused on “Value,” choosing where and how they spend. For Home Depot, Truist pointed to a large pool of untapped demand. More than $35 trillion of home equity is effectively sitting on the sidelines. With recent rate cuts, homeowners now have meaningful “dry powder” to put back into their homes. As long as existing home supply stays tight and prices remain flat to slightly higher, the firm said it remains bullish on the home improvement category.

That optimism sits alongside near-term caution. On December 9, The Home Depot, Inc. (NYSE:HD) forecast fiscal 2026 comparable sales growth and profit below analysts’ expectations. Demand for do-it-yourself projects and big-ticket purchases has cooled.

Management acknowledged the uncertainty. Customers are feeling uneasy, and that mindset is expected to carry into next year. “We have not yet seen a catalyst or an inflection in housing activity,” finance chief Richard McPhail said on an investor conference call. US housing demand has been uneven, pressured by rising unemployment and still-elevated home prices. Even as interest and mortgage rates ease, a clear recovery has not followed. In its latest earnings report, the company projected a steeper drop in fiscal 2025 profit.

Retailers such as The Home Depot, Inc. (NYSE:HD) are seeing consumers pull back on expensive renovations and large projects as borrowing costs stay high. Looking ahead, the company expects fiscal 2026 same-store sales to range from flat to 2%. That trails the 2.34% average estimate from analysts, based on LSEG data. The company also guided for adjusted EPS growth of flat to 4%, compared with expectations for a 5.6% increase.

While we acknowledge the potential of HD to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than HD and that has 100x upside potential, check out our report about this cheapest AI stock.

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