Investors can appreciate that putting money to work in the stock market and having a very long-term mindset can lead to truly remarkable results. This makes investing something I believe everyone should at least learn the basics of.
Although the overall market has increased over time, some businesses have been huge winners. In fact, there is one dominant retail stock that has produced a 3,330,000% return (as of December 18) since its inception. initial public offering in September 1981. That means a $10,000 investment made just over four decades ago would be worth a whopping $333 million today.
You don't want to miss this company. Perhaps it deserves a closer look at this point.
It's pretty amazing to think that Home Depot (NYSE: HD) was able to give such a great performance. I'm sure most readers would have assumed that the business in question had come into contact with the technology sector.
However, the world's leading home improvement chain has taken care of its shareholders by operating a simple business model, selling tools, supplies and equipment to DIY and professional customers through a network of physical stores. That playbook hasn't really changed.
About 30 years ago in 1993, Home Depot generated total sales of $9.2 billion. And it had 264 stores in operation. The management team in those days quickly understood that the right strategy was to invest aggressively to rapidly expand the footprint across the country.
These days, there are 2,345 Home Depot locations in total, with 2,024 in the United States and its territories, 182 in Canada, and 139 in Mexico. What's more, the company claims that 90% of this country's population is within 10 miles of a Home Depot. It's hard to overstate that wide reach.
Of course, it's no surprise that all that growth has led to a flagship retail venture. In the last 12 months, Home Depot reported $155 billion in revenue, astronomically higher than in fiscal 1993. And the business posted nearly $15 billion in net income in the past year.
Home Depot's financial position these days gives it the ability to return large amounts of cash back to shareholders. The company paid out $6.7 billion in dividends in the past nine months. The dividend yield just over 2.3% at the moment. Even more impressive is the fact that the quarterly payout has increased by 281% in the last decade.
Management also focuses on share buybacks. Over the past five years, the diluted share count outstanding has shrunk by 9.2%. This raises the ownership stake of the existing investors.