Home Depot cashes in on housing recoveryFebruary 26, 2013: 2:25 PM ET
Home Depot's stock rallied Tuesday, after the home improvement retailer reported strong results, boosted its dividend and announced plans to buy back shares.
Shares of Home Depot (HD) gained 5.6% in afternoon trading.
The nation's leading do-it-yourself home improvement retailer said sales rose 14% in the fourth quarter to $18.2 billion. That helped Home Depot report net earnings of $1 billion, or 68 cents per share, for the quarter.
On top of that, Home Depot's board raised its dividend payment 34% to 39 cents per share, and announced plans to buy back $17 billion of its own stock.
Home Depot CEO Frank Blake said the company benefited from "a continued recovery in the housing market," as well as a boost to sales and repairs in areas hit by Hurricane Sandy.
Investors on StockTwits were particularly impressed with Home Depot's same store sales growth, a measure of sales at stores open at least one year. That figure was up 7% in the fourth quarter.
The latest data on home prices and sales has also underscores the strength of the housing market.
The S&P Case-Shiller index of home prices in 20 major markets showed an annualized increase of 7.3% in the fourth quarter. Separately, the number of new home sold in January jumped more than 15% from the month before, according to the Census Bureau.
The nation's aging housing "stock" is another bullish factor for Home Depot, according to one trader.
Home Depot's results came one day after rival home improvement chain Lowe's (LOW) said sales and earnings fell in the fourth quarter, although the decline wasn't as bad as feared. Lowe's also announced a $5 billion share repurchase.