The Home Depot (NYSE:HD) has just reported earnings and the stock looks set to move on the news. As you know this is our home improvement store of choice that we highlighted well over one year ago with a buy recommendation. The Home Depot remains a strong name, and we recently described how it is our top retail choice for 2017. That is right. It is a retailer and one that is doing well.

While the retail sector is getting demolished, and HD has taken some lumps looking to make new 52 week highs. The name is still a pin action play on a strong housing market, as well as a strong economy, but it is a retailer nonetheless. We stand by this a top 2017 pick, because it has delivered, and much of the selling is noise related to overall fears in the sector. Now we are more than halfway into 2017, so the question is do we stick by the name? The answer is a resounding ‘yes,’ but we need to check into the performance of the company.

Home Depot’s just reported earnings were once again strong. In fact, it was once again a dandy of a quarter. That said, the company still has a valuation that is pricing continued growth at 23 times current earnings. But this is justifiable if the growth continues, and frankly, the growth is evident. Judging from this performance in Q3, the growth is there and looks set to continue, so its pricing is still justified. Barring overall market turmoil, it’s going higher. The company saw strong Q3 sales of $25 billion. This was a 8% increase compared to Q3 2016, and beat by a solid $450 million.

Comparable store sales also rose. In fact they were one of the largest highlights of the report. They came in 7.9% in Q3, and comparable sales for U.S. stores continue to be strong, coming in at +7.7%. This continues to be solid growth for a company of this size. While there was recent selling pressure, so far the company is holding up its end of the bargain for our 2017 buy call. The data also clearly suggests it was a good call as a top choice in the retail space, which is still being battered.

As you can imagine rising comparable sales and higher revenues led to better earnings. This is because the company has historically been exceptional at managing its expenses. Here in this report earnings per share were up 14.9% year-over-year. This growth is what we have become accustomed to and it helps justify the valuation. Net earnings for Q3 2017 came in at $2.2 billion. This translates to $1.84 per share, compared to $1.60 per share brought in during Q3 2016. These results surpassed estimates by $0.02.

While much of this improvement is from fiscal discipline and of course from rising sales, the earnings per share bump also reflects the company’s buyback which improves the earnings per share a bit. Still the continued growth is impressive and, in light of that, this remains a stock that you should consider on any meaningful pullback. Let us be clear. The name not only set new sales and earnings records, it smashed prior records.

It should be noted that Home Depot estimates that hurricane-related sales positively impacted comparable store sales growth by approximately $282 million in the fiscal third quarter. The gross margin on these hurricane-related sales was considerably less than the Company average. In the fiscal third quarter, the Company also incurred approximately $104 million of hurricane-related expense. As a result of the hurricanes, the Company’s operating profit was negatively impacted by approximately $51 million in the fiscal third quarter.

Craig Menear, Chairman and Chief Executive Officer and President of Home Depot, stated:

Though this quarter was marked by an unprecedented number of natural disasters, including multiple hurricanes, wildfires in the West, and earthquakes in Mexico, the underlying health of our core business remains solid. I am proud of our team and suppliers for their extraordinary efforts to support those in the path of the various natural disasters throughout the quarter. Our support of the impacted communities continues.”

Strong sales and earnings, as well as continued growth in comparable sales justify our buy call. With the stock off its 52 week high, we think you can do some buying here. Earnings and sales both beat estimates. That is the type of growth you like to see from a company you are invested in. For the last few quarters the company has met or beat expectations for the most part, and we see this continuing. Recall that Home Depot is a serial guidance raiser and is another reason we like this name long-term.

With these results Home Depot update its fiscal 2017 sales guidance and expects sales will be up approximately 6.3% and comp sales will be up approximately 6.5%. It then raised its earnings per share guidance for the year to grow approximately 14% from fiscal 2016 to $7.36 (up from prior guidance of $7.29).

Finally, the name is shareholder friendly. We would be remiss if we did not mention that the company recently gave us a nice raise of 29% to the dividend. In addition, it also recently announced an additional $15 billion buyback program. That is a winning combination. Home Depot consistently meets or beats expectations on many metrics. Bottom line, it’s a winner and you should be buying these dips.

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