Lowe's Vs Home Depot: Which Stock is Best Positioned for 2025 Growth?

Core Insights - Home Depot Inc. (HD) and Lowe's Companies Inc. (LOW) are the two leading players in the home improvement retail market, each with distinct strengths and strategies [1][4]. Company Overview - Home Depot has a market capitalization of $381.7 billion and a market share of approximately 47%, with fiscal 2023 revenues of$ 152.7 billion [5][6]. - Lowe's has a market capitalization of $139.2 billion, commanding around 28% market share, and reported revenues of$ 86.4 billion in fiscal 2023 [5][6]. Growth Projections - Home Depot's fiscal 2024 revenues are projected to grow by 3.9% year-over-year to $158.6 billion, with EPS expected to increase by 0.1% to$ 15.12 [8]. - Lowe's fiscal 2024 revenues are expected to decline by 3.5% year-over-year to $83.3 billion, with EPS likely to fall by 10% to$ 11.88 [11]. Earnings Estimate Trends - Home Depot has seen analysts raise revenue and EPS estimates, indicating year-over-year increases, while Lowe's has experienced a downtrend in estimate revisions [13]. - Home Depot's annual earnings are projected to increase by 3.4% to $163.9 billion in fiscal 2025, with EPS anticipated to expand by 3.5% to$ 15.65 per share [8]. - Lowe's annual earnings are expected to increase by 1.1% to $84.3 billion in fiscal 2025, with EPS anticipated to grow by 5.7% to$ 12.56 per share [11]. Stock Performance - Over the past year, Lowe's stock has outperformed Home Depot with a total return of over 13%, compared to Home Depot's 11% growth [14]. - Both companies have underperformed relative to the S&P 500's return of +26% and the broader Retail-Wholesale sector's total return of +31% [14]. Valuation Metrics - Home Depot trades at a forward P/E multiple of 24.6, while Lowe's trades at 19.71, both above their respective 5-year medians [16]. - The broader Zacks Retail-Wholesale sector trades at a forward P/E multiple of 24.8, indicating that both companies are relatively cheaper than the sector [17]. Dividend Analysis - Home Depot offers a dividend yield of 2.3% with a payout ratio of 60% and a five-year dividend growth rate of 11.2% [22]. - Lowe's provides a dividend yield of 1.8% with a lower payout ratio of 39% and a five-year dividend growth rate of 20.3% [22]. Investment Considerations - Home Depot is viewed as a safer investment for conservative investors due to its larger market share and established customer base, while Lowe's may appeal to those with a higher risk tolerance seeking potential upside [22][23].