If you bought $139,000 worth of Home Depot (NYSE:HD) stock 10 years ago, that position would be worth $1 million today (and more if you'd reinvested the dividends). The home improvement retailer has made itself a $290 billion company by taking care of its employees, its customers, and ultimately, its shareholders, benefiting from consumers' increased focus on their homes.

But the past is only a guide when investors try to predict the future. Home Depot was a retail superstar in 2020. Can it keep growing and become a millionaire-maker stock over the next 10 years? 

Do-it-yourselfers turned to Home Depot often in 2020.

Image source: Getty Images.

Fiscal 2020 recap 

Home Depot's revenue in its fiscal 2020 (which ended Jan. 31) grew 19.9% from the prior year, with a 25.1% jump in the fourth quarter. Comparable sales, or comps, soared 25% in the U.S. in the quarter, driven by massive gains in digital sales. These are impressive figures for a company this size.

The business was able to post record numbers because of the pandemic, as people stuck inside their homes focused their attention and their budgets on sprucing up their living quarters. It should come as no surprise, then, that this boosted Home Depot's do-it-yourself business the most. 

However, it's worth noting that the business segment targeting professional contractors registered double-digit growth in the quarter. This means that homeowners are getting more comfortable with people entering their homes and working on projects that they might have been expected to postpone due to health and safety concerns. 

With economies opening up and the world slowly returning to normal, it will certainly be tough for Home Depot to top this performance in 2021 and beyond as consumers spend more discretionary dollars on leisure and travel. 

Growth outlook 

Home Depot's store count expanded by a total of just 22 net new locations over the last five years, so it's evident that the company's future sales growth will need to come from more revenue per store, including digital. 

The company's One Home Depot strategy, announced in 2017, emphasized improving e-commerce and supply chain capabilities while focusing on the customer experience to grow revenue. The success of this investment was on full display last year. Sales using digital platforms soared 86% in fiscal 2020 compared to the prior year. 

The $8 billion acquisition of HD Supply in December will definitely help to drive top-line growth as well, giving Home Depot access to new customers in the fragmented maintenance, repair, and operations (MRO) market. 

But consensus analyst estimates only call for 2.1% revenue growth in fiscal 2021 and 3.5% the following year, which should tame investor expectations. 

Final word 

The pandemic provided the perfect tailwind for Home Depot's already successful business, so a repeat this year is most likely out of the question. But potential shareholders should be intrigued by Home Depot's current valuation. The stock is trading at 21 times next year's earnings, which seems like a bargain for such a historically great company coming off its best year. 

What's more, management just raised the quarterly dividend by 10% and expects to resume share buybacks this quarter, further hiking potential returns for investors. That dividend currently yields 2.5% with a payout ratio (dividends divided by earnings) around 50%, which should be sustainable.

Home Depot can certainly continue to outperform the broader market and become a millionaire-maker stock if investors hold for the long term. Just don't expect future returns to resemble the past. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.