HD vs ROST: Dividend Comparison
Dividend data as of
Home Depot, Inc. (HD) and Ross Stores, Inc. (ROST) are both in the Consumer Discretionary sector, making them natural rivals for dividend investors. HD offers a significantly higher 2.35% yield compared to ROST's 0.82%, a gap of 1.53%. ROST holds the edge in dividend safety with a "Safe" rating.
Verdict
Yield Analysis
HD yields 1.53% more than ROST. In dollar terms, HD pays $9.20/share vs ROST's $1.62/share annually.
Dividend Growth
Dividend Safety
HD: The payout ratio of 62% is moderate. The dividend is currently covered by earnings but leaves less room for growth.
ROST: The payout ratio of 25% is well within sustainable levels, leaving room for future increases.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in HD vs ROST today?
At $390.99 per share, $10,000 buys about 25.6 shares of Home Depot, Inc. (HD). Each share pays $9.20 per year in dividends, so the position starts out generating roughly $235 per year — about $20 a month.
At $196.40 per share, $10,000 buys about 50.9 shares of Ross Stores, Inc. (ROST). Each share pays $1.62 per year in dividends, so the position starts out generating roughly $82 per year — about $7 a month.
HD is the larger income stream from day one: $153 per year more on the same $10,000 invested.
Why is there no dividend growth comparison for HD and ROST?
REWD's dividend database has no five-year growth rate for Home Depot, Inc. (HD) or Ross Stores, Inc. (ROST) — most often because the dividend history is too short to compute one, which is common for companies that began paying dividends only in the past few years.
What the data does show for HD: a 2.35% current yield and a moderate 62% payout ratio. Until a multi-year raise history exists, treat any growth assumption for HD as a guess rather than a trend.
What the data does show for ROST: a 0.82% current yield and a 25% payout ratio, which leaves ample room to raise the payout from here. Until a multi-year raise history exists, treat any growth assumption for ROST as a guess rather than a trend.
Can HD and ROST afford their dividends?
Home Depot, Inc. (HD) pays out about 62% of its earnings as dividends, which implies roughly 1.6x earnings coverage.
Ross Stores, Inc. (ROST) pays out about 25% of its earnings as dividends, which implies roughly 4.0x earnings coverage.
ROST's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for HD if earnings weaken.
Which fits an early-retirement income portfolio better, HD or ROST?
For income you need right now, Home Depot, Inc. (HD) leads: $100,000 invested today pays about $196 a month at the current 2.35% yield, versus $69 a month from Ross Stores, Inc. (ROST) at 0.82%.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $297/yr in HD vs $89/yr in ROST by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR (0% where growth history is unavailable). A projection, not a prediction — no price appreciation modeled.
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