Home Depot Yields More Than 3x the S&P 500. Here's the Effect on a $10,000 Investment.

Home Depot (NYSE: HD) hasn't been on the winning team. Its shares are down 29% in the past 12 months (as of Sept. 24), and they currently trade 32% off their peak from December 2024. Macro headwinds have seriously pressured the company's growth, harming investor sentiment.

However, the retail stock pays a healthy dividend that currently yields 3.19%. This can satisfy income investors, and it's more than triple the 1.05% yield that the S&P 500 index pays.

Here's the effect of that yield on a $10,000 investment.

If you simply buy an S&P 500 exchange-traded fund, that hypothetical $10,000 capital outlay would generate $105 in annualized income. Investors who are after a passive income stream aren't lining up to add the benchmark to their portfolios.

Home Depot is the better choice in this regard. That same $10,000 invested in shares of the leading home improvement company would result in $319 in yearly income. That's significantly more than what the S&P 500 index would bring in.

The massive retailer's payout has also grown. In the past decade, Home Depot has increased its quarterly dividend by 238%.

The consistency is even more impressive, however. The business has paid a dividend in 158 straight quarters. Home Depot's ability to return capital to shareholders through various economic scenarios is a wonderful trait.

Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Home Depot. The Motley Fool has a disclosure policy.