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Home Depot Raises Dividend

It affirms full-year earnings and sales guidance.
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Home Depot

(HD) - Get Home Depot, Inc. Report

raised its quarterly dividend by 50% to 15 cents and affirmed earnings guidance for the year ending this month.

The dividend, payable March 23 to stock of record March 9, brings the annual payout to 60 cents, which Home Depot says is 20% of its annual per-share earnings. With about 2.1 billion shares outstanding, the company is paying out $1.26 billion a year in dividends on its common stock.

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For the year ending this month, Home Depot expects to earn $2.64 to $2.67 a share, in line with the Thomson First Call consensus estimate of $2.67 a share. The company put sales for the year at above $81 billion; the Thomson First Call consensus is $80.5 billion.

For 2006, the company said per-share earnings should grow 10% to 14% over 2005, implying $2.94 to $3.04 a share using the high end of its 2005 outlook. The Thomson First Call consensus is $3.03 a share. Sales should rise 9% to 12% from 2005, implying $88.3 billion to $90.7 billion. The Street estimate is $88.99 billion.

Home Depot also set a number of longer-term goals and affirmed its forecast for annual sales growth of 9% to 12% and annual per-share earnings growth of 10% to 14% through 2010. It expects to open 400 to 500 new stores over the next five years.

"Over the next five years, the company expects to maintain and grow its leadership position in home improvement retail worldwide. At the same time, it expects to become the nation's largest diversified wholesale distributor, become number one in services and dramatically increase its direct-to-consumer channels," it said.