The Home Depot (HD) ‘s share price plummeted 3.12% after being up 11.5% over the past 12 months, despite the release of an exceptionally strong quarterly report.
Home Depot’s management made cautious remarks, and investors were concerned that there isn’t a forecast for 2021. Some people feared that American homeowners would spend less on home repairs once the quarantine measures were lifted and instead conduct tours or other entertainment forms.
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One of the strongest retailers in the US, The Home Depot (HD), has posted strong growth for three quarters. Many long-term quarantined Americans took up home improvements and renovations. Home Depot operated 2,296 properties across all fifty states as of the end of the fourth quarter.
Statistics for the fourth quarter of 2020 at Home Depot
During the fourth quarter ended December 31, 2020, Home Depot increased earnings per share by 16% to $ 2.65, $ 0.04 more than analysts’ predictions of $ 2.61.
The quarter’s profit rose from $ 2.5 billion in fiscal year ’19 to $ 2.9 billion in revenue for the quarter in fiscal year ’20. On December 24, 2020, HD Supply Holdings was a $ 110 million acquisition, negatively impacting profit.
Revenue increased 14% to $ 32.3 billion, compared to the $ 30.66 billion analyst average.
The Home Depot (HD) gained nearly 20% in sales for full fiscal 2020, reaching $ 132.1 billion in revenue, compared with a net loss of $ 11.2 billion in the previous fiscal year.
On Tuesday, Home Depot announced an increase of 10% on their quarterly dividend, to $ 1.65 per share, equivalent to a $ 6.60 dividend per year. A dividend will be paid to registered shareholders on March 25, 2021, during the next fiscal year ending March 11, 2020.
This is Home Depot’s 136th consecutive quarter of dividend payments.
Is Home Depot’s growth in 2021 in doubt?
The Home Depot (HD) management has not provided revenue and profit forecasts for the financial year 2021 despite three consecutive quarters of growth. In a macroeconomic environment where forecasting consumer demand is complex, the year will be particularly difficult.
There was some speculation that the drop in purchases among regular shoppers could be offset by increased activity among wholesale buyers, such as construction crews. Following the end of the pandemic, consumers may require assistance to complete tasks they have delayed or have been unable to complete independently.
Statistics from the Home Depot are often seen as a barometer for the US housing market, resulting in heavy dependence on joblessness and government support.
Although total government spending has risen to $1.9 trillion, most Americans will receive a direct payment of $1,400 this week, as the US House of Representatives vote on the bill this week. This vote will impact housing stocks.