I am buying some more Home Depot (NYSE: HD) for my retirement account. The company needs no introduction. It is a Dow component and most home owners spend a good chunk of their home maintenance budget at their stores. I am planning on making the stock a core holding at roughly 6% of my portfolio and I hope to hold it forever.

At its current price of $38, Home Depot is trading at a reasonable 15 times its estimated (from ValueLine) 2005 EPS of $2.56. The company has been growing sales at 16%, earnings at 20% and dividends at a 25% annualized clip over the past five years. It is also buying back its shares (note the decreasing share count).

Home Depot is also growing aggressively by expanding its services business (like roofing, countertops etc.), making strategic acquisitions to supply merchandize to builders and professionals and gearing up to open stores in China. Looking ahead, ValueLine expects the company to grow earnings at double digits over the next five years.

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