The debate rages on about what's in store for the housing
market in 2014. One side says the recovery is still in the early
innings. The other side cites the potential for higher interest
rates in 2014 as well as continued strength in home prices as
deterrents to growth.
That the housing market is emerging from a big slump is good
news forHome Depot (
Earlier this week, the home-improvement chain reported fiscal
fourth-quarter profit of 73 cents a share, up 9% from a year ago.
Sales fell 3% to nearly $17.7 billion, hurt in part by bad
weather and one fewer week in the quarter. It was also a tough
comparison because sales in the year-ago quarter got a lift from
Sales at stores open at least a year (same-store sales) rose
4.4%. In the U.S., they rose 4.9%.
On the earnings conference call, CEO Frank Blake acknowledged
that it would be tough for the housing market to sustain growth
rates seen in 2013, but he said the company expects the recovery
to continue. Earlier this month, the company announced plans to
hire 2,000 employees in the Los Angeles area in anticipation of
strong spring demand after a wicked winter in many areas of the
Analysts expected solid growth for Home Depot going forward.
Fiscal 2015 profit is seen rising 18%, with 2016 profit up 17%.
In its just-concluded fiscal 2014, annual return on equity hit a
multiyear high of 35.5%.
As part of its earnings release, Home Depot raised its
quarterly dividend to 47 cents a share from 39 cents. The
dividend will be paid on March 27 to shareholders of record on
March 13. Home Depot currently yields 2.3%.
Shares of Home Depot are headed for their best weekly
percentage gain since mid-November. The stock is sitting just
below its all-time high of 82.57 set during the week ended Jan.
3. With the market still in a confirmed uptrend and with Home
Depot so close to its high, an upside breakout can't be ruled