Growth stocks had a strong run for many years. But over the past few months, investors have been pouring their money into safe stocks as they flee to security from the shaky macroenvironment. Some stocks seem to be totally resilient against macroeconomic forces, continuing to post steady growth despite inflation and supply chain issues. Home Depot (HD 0.94%) posted high growth when the pandemic started, and it's continuing to build on that even as tailwinds die down, and it looks unstoppable.

What macroeconomic challenges?

Stock prices began to fall toward the end of last year, but they plunged at the beginning of 2022 as many top companies revealed how bad their supply chain and inventory problems really were. It didn't take long for most of them to respond with defensive tactics, and stock prices have been cautiously rising along with confidence in the economy.

But Home Depot started off 2022 with healthy results in the first quarter, including increases in both comparable sales (comps) and earnings per share (EPS) in the first quarter, despite facing inflation and strong comps results from last year. It built on that in the second quarter, beating expectations and posting a 6.5% year-over-year increase in sales, including 5.8% higher comps and $5.05 in EPS versus $4.53 last year.

Although digital sales increased only 12% over last year, that continues to be a vital ingredient of the overall growth formula. Home Depot launched a new interconnected system for professional contractors (which the company calls "Pros") that ties together in-store and digital shopping, giving them more leeway in the ordering process. There were record downloads of the mobile app as well as record traffic and sales in mobile. All of the parts work together to create an efficient system that makes it easier for customers to place orders in whatever way works for them, leading to higher sales. More than half of digital sales were fulfilled in stores, as the next phase of the process further combines digital and physical sales channels to make the best use of Home Depot's resources.

Beating inflation 

In the second quarter (ended July 31), average comps ticket, or the average amount per sale, increased 9%, while transactions decreased 3%. The rise in average ticket was fueled by inflation, and Home Depot was able to pass that on to resilient customers. New and innovative product sales were also robust in the quarter. So even though Home Depot might not be your exclusive upscale location, it clearly attracts shoppers who are able to afford higher prices. That gives it a layer of resilience in challenging times, on top of its generally positive performance in a less pressured economy.

Aside from the inflation and supply chain issues that basically every retailer is contending with, Home Depot has the added challenge of decelerating home sales. Sales of existing homes in the U.S. fell for the sixth consecutive month by nearly 6% in July to a two-year low. However, Home Depot customers have demonstrated that demand for some amount of home improvement exists under almost any circumstances. For example, even as spring-related merchandise fell short of management's expectations, it was made up for by strong demand in project-related categories, both from Pros and do-it-yourself customers. 

Plus the dividend

Home Depot pays a dividend that yields 2.4% at the current price. However, even though it has been paying a dividend since 1987, it's not a Dividend Aristocrat, since it hasn't raised it annually for 25 years. It has raised it consecutively for the past 11 years, and it increased the dividend by 15% to $1.90 quarterly when it raised it in February.

Home Depot stock is still down 22% this year, giving investors the chance to buy shares of this excellent, high-performing company on the dip.