Key Takeaways
- Home Depot (HD) yields 2.8% and Walmart (WMT) yields 0.8%, so $10,000 pays $280 a year in Home Depot dividends against $80 from Walmart.
- Free cash flow covers both dividends, with cash dividend payout ratios of 61% at Home Depot and 57% at Walmart over the latest twelve months.
- Walmart’s business and its dividend are growing faster right now, while Home Depot’s bigger projects remain under pressure from a frozen housing market.
- Home Depot trades at 22x forward earnings, right at its five-year average, against 42x for Walmart.
Any retiree hunting for dividend income from the stores they already shop at is going to look hard at Home Depot and Walmart. This fall, the two gave income investors very different things to weigh.
Home Depot’s stock sat near 52-week lows in early October as weak housing turnover weighed on bigger projects. It then jumped 6.5% on Nov. 4 after Democrats won control of the House and Senate, as investors bet on housing-affordability policy and lower Treasury yields.
The board hasn’t touched the dividend: on Aug. 20, it declared a $2.33 quarterly payout, Home Depot’s 158th straight quarter of cash dividends.
Walmart, meanwhile, raised its full-year guidance in August on 23% growth in global e-commerce sales. So which one is the better bet for a retiree who wants a check they can count on?
| Metric | Home Depot (HD) | Walmart (WMT) |
|---|---|---|
| Dividend yield | 2.8% | 0.8% |
| Annual dividend | $9.32 | $0.99 |
| Dividend growth, 5 fiscal years to Jan. 2026 | 8.4% a year | 5.5% a year |
| Cash dividend payout ratio (TTM) | 61% | 57% |
| Net debt / EBITDA | 2.3x | 1.3x |
| Interest coverage | 8.4x | 12.3x |
Source: TIKR, Nov. 9, 2026; annual dividend from StockAnalysis. TTM to Aug. 2, 2026 (Home Depot) and July 31, 2026 (Walmart).
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Home Depot pays more from a slower business
Home Depot’s sales rose 5.7% to $47.9 billion in its Q2, ended Aug. 2, 2026. But comparable sales grew just 1.7%, and customer transactions fell 1.0% as bigger projects stayed on hold.
On the Q1 call in May, CEO Edward Decker said, “We’re not looking at a marked improvement in underlying demand.” Home Depot guides for adjusted EPS to grow anywhere from flat to 4% this fiscal year.
The dividend has grown faster than the cash behind it. From the year ended January 2017 to the year ended January 2026, dividends paid rose from $3.40 billion to $9.15 billion, while free cash flow grew from $8.16 billion to $12.7 billion:
Its cash dividend payout ratio climbed from 39% in the year ended January 2021 to a heavy 72% in the year ended January 2026, when free cash flow fell from $16.3 billion the year before.
It’s back to a manageable 61% over the twelve months to Aug. 2, 2026. The risks are net debt of 2.3x EBITDA and a dividend that rose just 2.2% in the year ended January 2026, against 8.4% a year over five years.
Walmart’s check is small, but growing fast
Walmart’s dividend is far smaller, but the business behind it is growing faster than Home Depot’s.
Revenue rose 5.9% to $187.9 billion in its Q2, ended July 31, 2026, and adjusted operating income jumped 17.4%, with advertising up 38% and membership fee revenue up 17%. Walmart now expects adjusted EPS of $2.80 to $2.87 for fiscal 2027.
Free cash flow has covered Walmart’s dividends with room to spare in every fiscal year on the chart, even as dividends paid rose from $6.22 billion in fiscal 2017 to $7.51 billion in fiscal 2026:
From fiscal 2022 to fiscal 2026, its cash dividend payout ratio stayed between 34% and 52%. It’s a comfortable 57% over the twelve months to July 31, 2026, with net debt of just 1.3x EBITDA.
Walmart’s dividend also rose 13.3% in fiscal 2026, well above its 5.5% a year over five years. The catch is the 0.8% yield, which pays a retiree very little today.
So which dividend wins?
For retirees, Home Depot is the better dividend stock. A retiree living off dividends needs the check itself, and Home Depot’s is much bigger and covered well enough at 61%.
$10,000 pays $280 a year at its 2.8% yield, against $80 at Walmart’s 0.8%. Even at each dividend’s pace now, that $10,000 would pay about $341 from Home Depot in year 10, against about $245 from Walmart, and Walmart’s income wouldn’t pass Home Depot’s until about 2039.
At their five-year rates, it never would.
A retiree isn’t paying up for that income, either. Home Depot trades at 22.7x forward earnings, right at its five-year average of 22x and well below its 28x peak in December 2024:
Walmart trades at 42x.
Walmart’s case is a strong one. It carries less debt, and its e-commerce, advertising and membership businesses are driving real profit growth, which shows up in a dividend rising faster than Home Depot’s right now.
It’s just that a retiree would wait until about 2039 for that growth to pay off, and at 42x, much of it is already in the price.
Of course, Home Depot’s dividend growth has slowed to a crawl, and a housing market that stays frozen could keep it there. If Walmart keeps raising at anything like its fiscal 2026 pace, its income would catch up sooner.
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any of the stocks mentioned. Thank you for reading, and happy investing!
