Home Depot Just Reported Earnings. Here's Whether the Dow Dividend Stock Is Still a Buy.
2026-09-06 08:05
•Lawrence Rothman, Cfa •The Motley Fool
•••••• • Axe Cap view
Is Home Depot Worth Buying After Its Latest Earnings?
Home Depot’s slow sales growth hides solid profits and dividend appeal amid high rates.
Home Depot’s recent earnings showed only 1.7% growth in stores that have been open for a year or more. That’s a slowdown, driven largely by high interest rates making homeowners reluctant to spend on big projects. But earnings per share still rose by over 5%, which signals the company is managing costs and margins well. Their 3.6% dividend yield is attractive in the current environment. While this is a US stock, the story matters to South African investors when you consider the rand’s reaction to dollar strength and risk sentiment. A firmer dollar pressures the rand (USD/ZAR), which can impact SA retail and banks indirectly. For now, patience is key—the sales growth may pick up once rates ease. But if rate hikes continue or inflation keeps sticky, it could weigh on Home Depot longer. this is just our opinion and not financial advice
Watch USD/ZAR closely for clues on global risk appetite. Consider adding Home Depot slowly on dips if dividend income is a priority, but don't overexpose to US consumer cyclicals while rates stay high.
- HD
- USD/ZAR
- Prolonged high US interest rates
- Further strength in the dollar hurting the rand and local markets
6/10
Home Depot reported sluggish same-store sales growth of 1.7% in Q2, with management expecting flat to 2% growth for the year due to high interest rates deterring homeowners from major projects. However, earnings per share grew 5.1% year-over-year to $4.92, and the analyst believes sales will eventually accelerate. With a 3.61% dividend yield and strong market position, Home Depot remains an attractive buy for patient investors.
Our take is based on reporting first published by The Motley Fool.