Periodically, a company puts on a clinic. You sit there rapt and you say, "These guys really get it."
I felt that way a couple of times this year. When Facebook (FB) gave its quarterly conference call, there was gem after gem of greatness: demonstrations of successful ad campaigns, empirical evidence of Facebook use, grandiose but realistic plans for virtual reality. It had it all. Alphabet's (GOOGL) conference call was a compendium of the future. You could just imagine how this company's goal is singular: Rule the world. It was a "sky's the limit" call.
General Electric (GE) told a great story of a renaissance of industrial in multiple categories with a fantastic possibility of a monstrous return of capital when it gets the chance. (General Electric is part of TheStreet's Dividend Stock Advisor portfolio.)
I know the stock got hit, but the lessons from that Starbucks (SBUX) call resonated with me: worldwide greatness, harnessing of technology, new ways to make customers feel special and a sense of optimism that was infectious.
And then along comes Home Depot (HD), and apologies to all those other calls, but this one was pantheon-worthy, mesmerizing even. Now, to be fair, I am totally cognizant of how Facebook or Alphabet astonished. But let's face it, Home Depot's in retail. All we have heard from retail is "woe is me" tales that make you feel like we have too many of everything: too many department stories, too many apparel stores, too many furniture stores, kids stores, sporting goods stores, mattress firms, you get the picture.
But you know what?
We have just enough Home Depots, just enough to generate a spectacular 8.9% comparable store growth. I don't know if I have the ability to explain just how amazing that is. Home Depot has 2,274 stores. It employs 385,000 people. This is a colossal operation and it is generating the kinds of numbers you expect from a company with 250 stores selling red-hot products that may not be sustainable.
This company sells things that go into your house. They sell nothing that you couldn't get elsewhere, whether it be Lowe's (LOW) or True Value or Wal-Mart (WMT) or Sears (SHLD) or Costco (COST). It is levered to housing, something that's been dead in the water in this country for ages. There is nothing new under the sun in this business, nothing that makes you say, "Holy cow, I have to get over to Home Depot right now because they have a red-hot sale and they are going to run out." (Facebook, Alphabet, Starbucks and Costco are part of TheStreet's Action Alerts PLUS portfolio.)
It's just not like that.
The company is doing great all over the country, but it has a spectacular double-digit number in the South. Do you know how much share they must be taking to get that kind of number? Every one of their merchandising departments reported positive comparable sales: appliances, tools, building materials were all up double digits. I mean, come on, that's just nothing but fabulous pricing and customer service because, again, you can go anywhere for this stuff. Even though it was the mildest winter in ages, HD had double-digit gains in roofing.
Or how about its online business: It's growing at an astonishing 25% rate and, I quote, "a significant portion of this online growth leverages the physical store assets that we have as over 40% of our online orders are picked up in stores." In other words, this isn't a lip-service omnichannel where they lose money. This is a home-run customer service strategy that works.
Meanwhile, how about returning capital to shareholders? Can you beat a 17% increase for its quarterly dividend to 69 cents a share? How about a buyback of $7 billion or 59 million of outstanding shares repurchased including $2 billion or 16.2 million shares in the fourth quarter?
And, guess what, it can get better. The company is forecasting 1.9 million new households -- the key metric besides rising home prices -- up from 1.3 million next year. All I can say is WOW!
Best of all: Not a complaint in the book, not about the weather, the fickle consumer, rising health care costs, inflation, deflation, Fed, interest rates, government interference foreign competition, nothing.
In short, Home Depot is the paradigm. It is like the football team that has the D, the O, the special teams and the coaching. It's a Super Bowl winner and a Hall of Famer at the same time. Plus, as the proprietor of the best garden on Long Island, all I can say is, "I can't wait to get to the company I call the Home Despot this spring so I can get to work on the plants I need to make Cramer's None-Better Tomato Sauce."