There are a variety of investing strategies that can be successful in building generational wealth if an investor sticks with a strategy through thick and thin. Whether an individual chooses growth investing, value investing, or income investing depends on their investment objectives.

Since I'm seeking to build a safe and growing stream of passive income, my personal approach to investing is focused on dividend-growth stocks. Leading retailer Home Depot (HD 0.74%) is among the core holdings in my portfolio.

But is it right for you? Let's take a look at the stock's fundamentals and valuation to point you toward an answer to that question.

Another strong showing for Home Depot

Home Depot proved its worth when it reported its tremendous fiscal 2022 first-quarter earnings results on May 17.

The company generated $38.9 billion in net sales during the quarter, up 3.8% over the year-ago period. And it comfortably beat the average analyst forecast of $36.8 billion, extending its streak of either matching or outperforming the analyst consensus to 10 quarters.

The company's comparable-store sales edged 2.2% higher year over year. According to Executive Vice President Jeff Kinnaird's opening remarks during the company's earnings call, 11 of Home Depot's 14 merchandising departments posted positive comps for the quarter. 

These admirable results were due to the company's best-in-class market share among professional contractors who tend to shop more frequently and spend more than do-it-yourself customers. This explains how Home Depot's big-ticket comp transactions (e.g., over $1,000) were 12.4% higher than the year-ago period. The other piece of the puzzle behind the company's top-line growth was the total location count increasing 0.8% year over year to 2,316.

Home Depot recorded $4.09 in diluted earnings per share (EPS) during the quarter, up 6% year over year. This trounced the average analyst estimate of $3.67, marking the ninth quarter out of the past 10 where the company beat the Wall Street consensus.

The company also reduced its outstanding share count 3.8% in the past year thanks to its share-repurchase program.

Impressive dividend growth should continue

Having nearly sextupled its dividend in the last 10 years, Home Depot is a legitimate dividend-growth stock. And it looks like spectacular dividend growth will persist in the years ahead for two reasons.

First, analysts estimate the company will deliver 14.6% annual diluted EPS growth over the next five years. This will come from a combination of sales growth, margin expansion, and share buybacks.

Second, Home Depot's dividend-payout ratio is very manageable at 43% for the trailing 12-month period. This should allow the company to increase its payout in line with earnings growth over the medium term. A low-teens annual dividend-growth rate and a market-beating 2.7% yield make Home Depot an especially attractive dividend stock.

The valuation is reasonable

Home Depot seems to be a growth, income, and value stock trifecta. The valuation is the cherry on top that should make the stock a buy for just about any type of investor.

Its forward price-to-earnings (P/E) ratio of 17 is essentially in line with the home improvement industry average of 16.2. Given the company's undeniable leadership in the space, that small premium is well-deserved.