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“When we own portions of outstanding businesses with outstanding managements, our favorite holding period is forever.”

— Warren Buffett

A long-term investment in Home Depot Inc (NYSE: HD) illustrates how durable business performance, dividend growth, and reinvestment can combine to produce substantial shareholder returns. Using a 20-year buy-and-hold framework starting in October 2006, the stock generated a strong total return, turning a $10,000 investment into more than $143,000 with dividends reinvested.

That outcome matters because Home Depot is not simply a share-price story. As the largest home improvement retailer in the United States, the company has benefited over time from scale, brand recognition, a large professional customer base, and recurring demand tied to housing maintenance, repair, and renovation. Those business characteristics have helped support both earnings growth and a meaningful dividend stream.

Home Depot 20-Year Total Return

HD 20-Year Return Details
Start date:	10/20/2006	$10,000 10/20/2006   $143,046 10/19/2026
End date:	10/19/2026
Start price/share:	$35.99
End price/share:	$309.88
Starting shares:	277.85
Ending shares:	461.70
Dividends reinvested/share:	$81.50
Total return:	1,330.71%
Average annual return:	14.22%
Starting investment:	$10,000.00
Ending investment:	$143,046.06

The figures above imply that Home Depot delivered a compounded annual return of 14.22% over the period. In practical terms, a $10,000 investment grew to $143,046.06 by 10/19/2026, assuming dividends were reinvested. On a total return basis, that equates to 1,330.71%.

[These numbers were computed with the Dividend Channel DRIP Returns Calculator.]

What Drove the Return

Home Depot’s long-term return came from two sources: capital appreciation and cash distributions. The stock price rose from $35.99 to $309.88 per share over the measurement period, but the total outcome was also enhanced by a substantial stream of dividends.

Over those 20 years, Home Depot paid $81.50 per share in dividends that were assumed to be reinvested. Reinvestment increased the share count from 277.85 shares to 461.70 shares. That growth in share ownership is central to the compounding effect: dividends purchased additional shares, which in turn generated additional dividends over time.

Why Dividend Reinvestment Matters

Dividend reinvestment can materially change long-term results, particularly for companies that steadily raise their payouts. In Home Depot’s case, the dividend component was not incidental. It meaningfully increased ending wealth by expanding the investor’s share base throughout the holding period.

In simple terms:

• Price appreciation increased the value of each share.
• Dividends provided cash along the way.
• Reinvestment converted that cash into additional shares.
• Those additional shares compounded future returns.

Current Yield and Yield on Cost

Based on the most recent annualized dividend rate of $9.32 per share, HD has a current yield of approximately 3.01% using the ending share price shown above.

A separate concept is yield on cost, which measures the current annual dividend relative to the original purchase price. Using the original entry price of $35.99 per share, Home Depot’s current annualized dividend implies a yield on cost of 25.90%.

That distinction is important. Current yield describes what a new buyer would receive at the current market price. Yield on cost describes how the income stream has grown relative to an earlier investor’s original capital outlay. For long-held dividend growth stocks, the two figures can diverge sharply.

What the 20-Year Record Suggests

Home Depot’s performance over this period highlights a recurring feature of successful long-term equity compounding: the best outcomes often come from businesses with durable market positions, consistent cash generation, and the capacity to return capital to shareholders while still investing in operations. In retail, that is difficult to sustain across multiple cycles. Home Depot managed to do so through changing housing conditions, shifting consumer demand, and broader market volatility.

Past gains do not determine future returns, but the historical record does show what can happen when a high-quality business is held through time rather than traded around short-term uncertainty. For Home Depot, the combination of business durability and disciplined dividend reinvestment proved especially powerful.

One final investment quote captures that long-term perspective:
“Never is there a better time to buy a stock than when a basically sound company, for whatever reason, temporarily falls out of favor with the investment community.” — Geraldine Weiss