Home Depot's Payout Puzzle: $66 Billion in Checks but Lagging Stock

Home Depot (HD) has returned $65.6 billion to its owners over the last five years through dividends and buybacks, which is 22.6% of the company's market value. This is a significant amount compared to the median S&P 500 company at 16.8%. However, despite these payouts, the stock's performance has been disappointing, with a total return of -2.3% over the same period, even with dividends reinvested.

The cash flow engine that drives Home Depot's ability to make these payouts is its consistent free cash flow, which has ranged between $12.6 billion and $17.9 billion in every trailing-twelve-month period over the last three years. The company generated $169.18 billion in revenue over the last twelve months.

Management has been focusing on what it can control, such as 'winning the Pro' customer and creating a 'frictionless interconnected experience.' A key part of this strategy is speed, with the launch of nationwide Express Delivery on August 18, 2026, promising eligible items in three hours or less.

The company's ability to keep writing checks depends entirely on its sales and margins. Management has reaffirmed its guidance for fiscal 2026, expecting full-year comparable sales to range between flat and 2% growth. Hitting this target would signal that the core business is resilient enough to keep funding the dividend.