Home Depot (symbol: HD) announced today that it is raising its dividend by 50% to 22.5 cents per quarter, beginning with the dividend being paid on November 30, 2006. This is the second time Home Depot has raised its dividend during 2006. Back in Jaunary 2006, Home Depot announced it was raising its dividend from 10 cents per quarter to 15 cents per quarter. So that is a total increase of 125% in Home Depot's quarterly dividend this year! Back in 1999 Home Depot paid 2.75 cents/quarter. Its dividends have therefore increased some 718% since 1999. The odd thing is that Home Depot is still trading below where it was in 1999 despite the huge increase in its dividend and a more than 200% increase in its earnings per share.
I wrote a post back in February where I argued that Home Depot is a "strong buy." I still believe that Home Depot is a good-long term buy. It may not perform well over the short term, but as its earnings and dividends continue to rise Wall Street will eventually take notice and bid its shares higher like it did during the 90s. The Value Line projects that Home Depot will trade between $95 and $125/share between 2009-2011, a gain of between about 160% and 245%.