HD Home Depot Inc

By Austen Hufford 

Home Depot Inc. on Tuesday posted sales growth in its fourth quarter and boosted its dividend and buyback program, as the housing market continues to grow.

Shares, which have risen 12% over the past three months, rose 1.8% in premarket trading.

The company raised its dividend to 89 cents from 69 cents previously and authorized a $15 billion share repurchase program, replacing its previous program. Two years ago, the company authorized an $18 billion buyback program. Home Depot also said that the target share of earnings paid out to shareholders in dividends -- known as the dividend-payout ratio -- would be increased to 55% from 50% currently.

For the year, the company projects earnings per share of $7.13 and sales and comparable-store sales growth of 4.6%. Analysts polled by Thomson Reuters were expecting $7.17.

The Atlanta-based company has reported rising sales as the housing market grows and Americans become increasingly willing to spend on home-improvement projects. Low mortgage rates have kept higher prices within reach of many borrowers and prices have increased in many U.S. housing markets over the past couple of years.

The company said there was a healthy housing market and strong customer demand in the year.

During the most recent quarter, sales at Home Depot stores open at least a year grew 5.8%. Analysts polled by Consensus Metrix were expecting 3.5% growth.

In all, Home Depot reported a profit of $1.74 billion, or $1.44 a share, up from $1.47 billion, or $1.17, a year prior. Revenue climbed 5.8% to $22.21 billion.

Analysts polled by Thomson Reuters had projected earnings of $1.34 a share on $21.81 billion in sales.

At the quarter's end, Home Depot operated 2,278 retail stores in all 50 states, Canada and Mexico. The company's sales per square foot rose 5.7% as the amount the average customer spent per transaction rose 2.9%.

Write to Austen Hufford at austen.hufford@wsj.com

(END) Dow Jones Newswires

February 21, 2017 07:05 ET (12:05 GMT)

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