The Home Depot Inc. (NYSE: HD) has found its footing again in retail for a mix between home improvement for consumers and for construction materials for builders. After two years of big dividend hikes, 24/7 Wall St. has two observations about the home improvement retail giant’s future of dividends. The first is that dividend growth is likely to become more modest, but the second is that Home Depot’s dividends could likely grow quite nicely for another decade.

24/7 Wall St. recently named Home Depot as being one of nine companies which should be able to raise their dividends for a decade ahead. What stood out here was that Home Depot just seemed to be doing a better job than rival Lowe’s Companies Inc. (NYSE: LOW). Lowe’s yields just over 1.5% versus almost 2% for Home Depot. Still, Home Depot trades at a slight discounted P/E ratio versus Lowe’s but commands a higher multiple versus its sales. Home Depot shares were also last seen up 19% in 2015 versus a gain of about 8.3% for Lowe’s in 2015.

Home Depot’s shares have managed to rally with the broader market and they recently hit new all-time highs. In fact, they have risen from roughly $20.00 at the trough of the recession to $123.00 or so at this time. Its recovery came at a time when building of new homes has been muted, and at a time when home owners put off their renovations and repairs as long as they could stand.

With home starts still not exactly robust and with consumers finally seeing a payoff in recent years for the improvements they have made, this may be a perfect storm for Home Depot. So far we have also gone two years without massive storms creating billions worth of damage.

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Home Depot has nearly doubled its dividend over the last four years and the dividend has almost quadrupled since prior to the hike right before the recession kicked into gear.

The Dow Jones Industrial Average component now pays out about 45% of current operating earnings in the form of dividends. The company has also said that it will be buying back more common stock than it had historically bought in the market. That might lead to a more meager dividend hike in 2016 — but that would also set up the impetus for a stead dividend hike trend to continue.

Home Depot’s earnings per share growth of 10% is on roughly 5% revenue growth, and that should allow for dividend hikes to continue at a more modest pace to boost that 2% yield today. Merrill Lynch recently introduced Home Depot’s earnings per share estimate growing to $6.09 EPS in 2017 and $6.83 EPS in 2018 — versus $4.58 EPS in 2015 and $5.31 EPS for 2016.

More modest growth in the dividend would still allow Home Depot to have a payout of 50% or so of its earnings in the years ahead, and that would put a forward dividend of close to $3.40 per year in 2017 to 2018. That would be more than $1.00 than the $2.36 annualized dividend Home Depot currently pays and still leave room for share buybacks.

Shares of Home Depot recently were trading at $123.00, with a consensus analyst price target of $131.61 and a 52-week trading range of $89.77 to $123.80. The company has a total market cap of $157.5 billion.

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