Portfolio Manager Seth Shalov of MAI Wealth Advisors, LLC, is still finding The Home Depot, Inc. (HD) attractive, due to the company’s consistent dividend increases and its exposure to the improving U.S. housing market.
“In 2013, Home Depot raised their dividend by 34%. In 2014, Home Depot also announced another 20%-plus dividend increase. Going forward, we believe they will be able to raise their dividend about 12% to 14%,” Shalov said.
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Shalov is also confident in Home Depot’s cash flow yield as well as its position as the largest home improvement retailer in the world, which will benefit the company as the housing market continues to recover.
“The payout ratio is reasonable, and the company has a free cash flow yield of over 6%. Looking at the economic landscape, we believe that Home Depot, which has done very well, is poised to benefit from the improvement in the U.S. housing cycle,” Shalov said.
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