5 Best Dividend Growth Stocks to Buy Now

In this article, we discuss 5 best dividend growth stocks to buy now. You can skip our detailed analysis of dividend growth stocks and their returns in the past, and go directly to read 10 Best Dividend Growth Stocks to Buy Now. 

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

Years of Consistent Dividend Growth: 12
5-Year Compound Average Dividend Growth Rate: 16.4%

The Home Depot, Inc. (NYSE:HD) is a Georgia-based home improvement company that specializes in construction and other home appliances. In August, Truist raised its price target on the stock to $399 and maintained a Buy rating on the shares, appreciating the company’s solid Q2 results. The firm also highlighted the growth in its Home Improvement segment.

In Q2 2022, The Home Depot, Inc. (NYSE:HD) reported solid cash generation with its operating cash flow of nearly $3.4 billion. Its free cash flow for the quarter came in at $2.65 billion. At the end of July, the company had $1.2 billion in cash and cash equivalents, with $33 billion available in total current assets. In addition to this, the company’s net income came in at $9.4 billion, up from $8.9 billion during the same period last year.

The Home Depot, Inc. (NYSE:HD) currently pays a quarterly dividend of $1.90 per share, with a dividend yield of 2.81%, as of September 25. The company has raised its dividends for 12 years in a row and has a five-year dividend CAGR of 16.4%.

As per Insider Monkey’s database, 80 hedge funds tracked by Insider Monkey owned stakes in The Home Depot, Inc. (NYSE:HD), growing from 75 in the previous quarter. These stakes hold a collective value of over $5.3 billion, compared with $5.6 billion worth of stakes owned by hedge funds in the preceding quarter.

Diamond Hill Capital mentioned The Home Depot, Inc. (NYSE:HD) in its Q1 2022 investor letter. Here is what the firm had to say:

“Home Depot shares underperformed as continued solid fundamental results were outweighed by concerns about the impact rising mortgage rates may have on the housing market and general inflationary pressures potentially leading to a consumer spending slowdown. We view the long-term prospects and multi-year fundamental outlook as unchanged.”