Home Depot (HD 1.62%) has been an amazing stock for investors who have bought and held for the long term. Although it's not a growth stock, it has outperformed the market, and by a wide margin.

Several factors contribute to its success, and it's a clear example of the "winners keep on winning" investment strategy. It also has another secret: the dividend. In fact, Home Depot's dividend has added incredible value to the stock as a whole.

And it's more than the passive income; if you'd never taken the dividend as passive income and instead reinvested it in growing your position, you'd have a lot more money, depending on when you'd invested. If you'd invested $1,000 20 years ago, you'd have nearly doubled your gain from the dividend.

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The story isn't over, and Home Depot can continue to grow and reward investors. But can it set you up for life?

Everyone's improving their homes

Home Depot is the largest home improvement chain in the world, with 2,300 stores in North America. In general, home improvement tends to be a growing industry, and as the leader in the space, Home Depot benefits from organic growth trends.

But it has heavily invested in its stores, digital channels, and product assortment over the past few years, and it has positioned itself to stay strong despite the inflationary climate. One maneuver has been investing in its logistics network to get products to customers faster, particularly large, bulky items. It's also made several acquisitions, most recently SRS Distribution, which targets its Pro customers. This expands its addressable market and opens up new growth opportunities.

It's also still opening new stores, although at a slow pace. It opened 12 new stores in 2024 and has plans for another 13 in 2025.

Home Depot beat expectations with a fantastic 2024 fiscal fourth quarter (ended Feb. 2), starting with a 14% year-over-year increase in revenue to $39.7 billion, and a 0.8% increase in comparable sales (comps). That was the first increase in comps in nine quarters. Earnings per share (EPS) were $3.02. Online sales increased 9% year over year in the quarter as consumers take advantage of Home Depot's improved delivery speed. Wall Street was looking for $39.2 billion in revenue and $3.01 in EPS.

Despite continued high mortgage rates, management is hearing from its customers that they're ready to move on. "Home improvement always persists," CFO Richard McPhail said in an interview. The combination of a no-brainer industry with Home Depot's stellar model has led to incredible shareholder value.

That doesn't mean Home Depot is expecting a huge rebound this year; it's guiding for sales to increase 2.8% and comps to rise 1% in 2025. It's expecting EPS to decline from $14.91 last year.

How high can Home Depot stock go?

Home Depot stock tends to beat the market because it's so reliable for strong performance. However, it's a mature stock, and it isn't likely to deliver earth-shattering gains for new shareholders.

As with any stock, the amount you make depends on the amount you put in. But if you're just starting out and thinking about whether a small amount invested in Home Depot stock will turn into millions, I think you should find a different stock.

What if Home Depot's revenue would increase at a compound annual growth rate of 5% over the next 20 years? This optimistic growth spurt would add up to $425 billion in 2045, or less than three times the amount it is today.

If you're looking for a high-growth stock as part of a millionaire-maker portfolio, you might want to look elsewhere. But if you're looking for an excellent value pick with a top dividend, Home Depot deserves a second look.