Dow Dividend Checkup: Home Depot

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The following video is part of our "Motley Fool Conversations" series, in which analyst John Reeves discusses topics from across the investing world.

Home Depot has been on quite a run over the past three years or so, and investors hope to see more upside if housing begins to make a stronger recovery. It raised its dividend recently, and has paid a cash dividend consecutively for 100 quarters. John suspects the company will be looking to increase its dividend in the future. On a relative basis, it stacks up well. Its yield is 2.65%, which is higher than Dow stalwart Wal-Mart's 2.55%, as well as higher than competitor Lowe's, which comes in at 2.1%. So far, in 2012, it's been one of the top-performing stocks in the Dow, with a positive return of 17% -- which compares with Bank of America, the leader with a 29%-plus return. How secure is the dividend? Probably pretty secure, since its payout ratio is quite reasonable. The one thing to look at is the macro environment. So far, housing has taken longer than expected to return to health. Hopefully, we'll see a bigger turnaround soon.

Home Depot is a fairly solid dividend-paying company. If you're interested in learning more about some outstanding, handpicked, income-generating stocks, The Motley Fool has compiled a special free report outlining our top nine dependable, dividend-paying stocks. It's called "Secure Your Future With 9 Rock-Solid Dividend Stocks." You can access your copy today at no cost! Just click here to discover the winners we've picked.

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