Investing in the stock market works best when people truly adopt a long-term mindset. By setting a time horizon of decades rather than days or months, investors can harness the magic of: mix.
Historically, S&P500 The average annual return is approximately 10%. dividend. But there are some businesses that can completely wipe out that profit.
In fact, the company invested $1,000 in one top retail stock. initial public offering (IPO) in September 1981 would be almost worth it Today it’s $32 million. Learn more about this company’s rise and whether the stock is a smart buy today.
boring job.exciting return
Investors may be surprised to learn that no other stock has delivered such impressive returns. home depot (New York Stock Exchange: HD). The company sells home improvement products to both do-it-yourself enthusiasts and professional customers through its store network.The company is an industry leader and significantly outperforms smaller rivals lowe’s.
The key to the company’s impressive performance has been the expansion of store space. Currently, the chain has 2,335 stores, the majority of which are in the United States. According to the company, 90% of the US population lives within 10 miles of a home improvement store.
Thirty years ago, there were only 264 stores. Given the potential for rapid expansion and replication of the business model, it’s no wonder management was investing aggressively in growth. Consistent sales and profit growth helped push up the stock price.
At its current size, this retailer is incredibly profitable. In its 2023 fiscal year, which ends in January 2024, it generated $15 billion in net income and $21 billion in operating cash flow, astronomically higher numbers than at its IPO.
And management has shown a commitment to prioritizing returning capital to shareholders. Home Depot has paid out $16 billion in dividends over the past 24 months, and its stock currently yields about 2%. The company has paid dividends for his 148th consecutive quarter, increasing shareholder returns and pushing that $1,000 into millions of dollars.
Should you buy Home Depot stock now?
Owning Home Depot stock isn’t all that fun these days. However, the stock price is still benefiting investors. It has more than doubled in the past five years, and nearly fivefold in the past 10 years (as of March 26). These gains exceeded the S&P 500.
Nevertheless, it’s wise not to expect the stock’s future to resemble its past.The company transports a huge amount of goods Market capitalization The company had sales of $379 billion and generated $153 billion in revenue in 2023. Growth has slowed and will continue to do so.
The business is dealing with a downturn after demand for renovation projects surged during the stay-at-home era early in the pandemic. Last year’s sales decreased by 3%, but management expected this year to increase by 1%. Investors may be hesitant to pay 25 times earnings for a business that isn’t currently growing.
But I still think it’s a smart buying opportunity for long-term investors. Home Depot dominates the industry, owns a strong brand, and has the resources to develop its supply chain and omnichannel capabilities.
As a result, the business remains second to none when it comes to servicing its customers. This should help it continue to gain market share in the $950 billion home improvement industry.Once the economic headwinds subside, Home Depot should record healthy growth. Investors are likely to be rewarded.
Should you invest $1,000 in Home Depot right now?
Before buying stocks at Home Depot, consider the following:
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Neil Patel And his client has no position in any of the stocks mentioned. The Motley Fool has a position in and recommends Home Depot. The Motley Fool recommends Lowe’s Companies. The Motley Fool has Disclosure policy.
1 The unstoppable stock that turned $1,000 into $32 million. Should I buy it now? Originally published by The Motley Fool
https://finance.yahoo.com/news/1-unstoppable-stock-turned-1-193500545.html
