The Almighty has said,
“O people! You are the ones who stand in need of Allah, while Allah is the self-Sufficient, the Praised One” (Qur’an, 35:15).
The root word of ”al-hameed” is hamd which means: praise, something more general than thanking. Al-Hameed is also al-Mahmood, the Praised One. Allah (SwT) is al-Hameed due to praising His own Self since time immemorial, and also due to His servants praising Him. His qualities, such as being Glorified and Exalted, are due to the fact that those who mention His Attribute glorify and exalt it.
Hamd in this context means enumerating or the attempt to enumerate the qualities of perfection conceived by those who praise Him. Al-Hameed grants you success and compliments you for it; He wipes out your sins and does not embarrass you by exposing them. He is Praised due to His merits.
One whose beliefs, conduct, speech and action are praiseworthy is called hameed. Such a description fits only the Messenger of Allah (S) and those whose ranks from among Allah (SwT)’s prophets are close to his, as well as others such as the friends of Allah (SwT), and the scholars. Each one of these is hameed with regard to his beliefs, conduct, deeds and statements.