Stock price when the opinion was issued
Last September, he sold and took profits. Shares are trading ~24x forward PE, for 5% EPS growth. Valuation's expensive. EPS growth rate expectations have come down. Cautious spending by consumers, stock's slipped below 200-day MA. Long-term inflation is dampening the DIYers, sluggish home sales. A name to own early economic cycle, and we're about mid-way through now.
Covid saw overspending by consumers, then underspending, now normalizing. Rising interest rates have affected lower-income US households, and that's showing up in HD traffic numbers. In US, over 50% of homes are over 40 years old; long-term secular trend to repair and modernize.
Dividend growth strategy? She agrees with buying this if you want dividend growth. They continue to build and grow their top and bottom line. The 100-pound gorilla in their arena. You have to be very careful about the methodology of dividend growth. It is not necessarily about buying utilities, which seem very appealing. But they’ve been bid up by everybody looking for dividend yield. You are much better off buying oddball things like Texas Roadhouse (TXRH-Q). Be careful of telecommunication companies, because they will be squeezed. A good dividend yielding stock that is off the radar is Domtar (UFS-N). (See Top Picks.)