Home Depot vs. Lowe's: Which Home Improvement Titan Holds the Edge?

In the U.S. home improvement arena, The Home Depot, Inc. HD and Lowe’s Companies, Inc. LOW reign supreme, two retail giants that have built their empires brick by brick. Together, these companies dominate a market valued at more than half a trillion dollars, commanding the lion’s share of the do-it-yourself (DIY), do-it-for-me (DIFM) and professional contractor segments.Home Depot, the industry leader, has long leveraged its scale, supply-chain efficiency and strong Pro-customer base to maintain its edge in both sales and profitability. Lowe’s, its closest rival, continues to narrow the gap through store modernization, merchandising enhancements and targeted growth in professional services. While both cater to homeowners and builders alike, their strategic priorities and customer mixes differ, shaping distinct growth trajectories.As the housing and renovation cycle evolves, the battle for market share between these two retail powerhouses intensifies, making the HD vs. LOW showdown a true test of resilience, execution and long-term market positioning.The Investment Case for HDAs the undisputed leader in the U.S. home improvement retail market, Home Depot commands a dominant position, estimated at nearly half of the $1-trillion home improvement industry. With a network of 2,353 stores across North America and a growing digital presence, online sales rose 12% year over year in second-quarter fiscal 2025.The company’s scale and supply-chain depth give it a formidable competitive edge. Its diversified customer base spans DIY homeowners to professional contractors, enabling HD to capture steady demand across residential and small-scale commercial projects even in volatile macro conditions.Home Depot’s strategic expansion of its Pro ecosystem has been a key growth driver. The acquisitions of SRS and the pending GMS deal have extended its reach into specialty trade segments like roofing, drywall and landscaping, verticals that complement its core retail network.These moves are expanding HD’s total addressable market while enhancing its ability to cross-sell and fulfill complex, multi-category projects. The company’s investment in trade credit, AI-driven logistics and machine learning for “ship-from-best-location” fulfillment strengthens its professional proposition and operational efficiency.Home Depot continues to deliver resilient performance, reporting second-quarter fiscal 2025 sales of $45.3 billion, up 4.9% year over year, and maintaining an adjusted operating margin of 14.8%. Its return on invested capital of 27.2% underscores disciplined capital allocation. With a robust dividend payout, consistent cash generation, and an expanding digital and Pro-driven growth runway, Home Depot remains a cornerstone investment in the home improvement sector.The Investment Case for LOWLowe’s stands as the second-largest home improvement retailer in North America, commanding roughly one-fourth of the U.S. market, a position fortified by its expanding Pro and digital ecosystem. In second-quarter fiscal 2025, the company posted sales of $24 billion, up 1.1% year over year, with strong momentum in Pro, Online and Appliances categories. Its adjusted EPS of $4.33, which moved up 5.6%, and an operating margin of 14.7% underscore disciplined cost management through its Perpetual Productivity Improvement initiatives, which continue to enhance efficiency and the gross margin.Lowe’s is sharpening its edge through acquisitions and innovation. The Foundation Building Materials (FBM) acquisition marks a transformational move, unlocking access to a $250-billion Pro total addressable market and strengthening Lowe’s capabilities in drywall, ceilings and insulation distribution. Combined with Artisan Design Group (“ADG”), this builds a full-spectrum interior solutions platform for large and mid-sized Pros. Lowe’s “Total Home Strategy” extends this focus, integrating Pro services, digital tools like the myFBM mobile app and AI blueprint takeoff technology, and a growing marketplace powered by the Mirakl platform.With a diverse product mix, an omnichannel reach across more than 1,750 stores, and a rising share of high-value professional customers, Lowe’s is positioning itself for sustainable, long-term growth. Its return on invested capital of 29.5% and strong free cash flow generation ($3.7 billion in the fiscal second quarter) reflect robust financial health. As the company deepens its Pro penetration and expands digitally, Lowe’s stands ready to capture incremental market share in the evolving home improvement landscape.HD vs. LOW: How Do Estimates Stack Up?The Zacks Consensus Estimate for Home Depot’s fiscal 2025 sales and earnings per share (EPS) implies year-over-year growth of 2.9% and a decline of 1.5%, respectively. The consensus estimate for EPS for the current fiscal year has been unchanged in the past 30 days. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Lowe’s fiscal 2025 sales and EPS suggests year-over-year growth of 1.8% and 2.7%, respectively. The consensus estimate for EPS for the current fiscal year has moved up 0.3% in the past 30 days. Image Source: Zacks Investment Research Stock Performances of HD & LOWHome Depot’s shares have lost 2.5% in the past year, while Lowe’s stock has declined 7.3%. While both stocks have declined, HD’s outperformance reflects scale advantages, Pro segment growth and strong tech integration. Meanwhile, LOW’s stock performance reflects ongoing transformation efforts tempered by soft DIY sales. Image Source: Zacks Investment Research Dive Into Stock Valuation of HD & LOWHome Depot is trading at a forward price-to-sales (P/S) multiple of 2.26X, above its median of 2.22X in the last five years. Lowe’s forward 12-month P/S multiple sits at 1.55X, above its median of 1.48X in the last five years. Here, Home Depot is pricier, with the higher forward P/S multiple. Image Source: Zacks Investment Research HD vs. LOW: Which Is the Smarter Bet?Home Depot emerges as the stronger contender, backed by its superior near-term stock performance and robust growth outlook. Its scale, deep-rooted Pro ecosystem, and ongoing strategic expansions through acquisitions like SRS and GMS continue to reinforce its leadership in the sector. The company’s digital transformation, supply chain efficiency, and growing professional customer base create a strong foundation for sustained revenue momentum, even amid a soft housing backdrop.While Lowe’s remains a formidable rival with solid operational discipline and a strengthening Pro focus, Home Depot’s execution and innovation-driven model gives it an edge in capturing incremental market share. Despite trading at a premium, the valuation appears justified, reflecting investors’ confidence in its growth trajectory and market dominance. For investors seeking stability with upside potential, Home Depot stands out as the sturdier long-term bet in the home improvement duel.HD currently carries a Zacks Rank #2 (Buy), whereas LOW has a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.Quantum Computing Stocks Set To SoarArtificial intelligence has already reshaped the investment landscape, and its convergence with quantum computing could lead to the most significant wealth-building opportunities of our time.Today, you have a chance to position your portfolio at the forefront of this technological revolution. In our urgent special report, Beyond AI: The Quantum Leap in Computing Power, you'll discover the little-known stocks we believe will win the quantum computing race and deliver massive gains to early investors.Access the Report Free Now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Lowe's Companies, Inc. (LOW): Free Stock Analysis Report The Home Depot, Inc. (HD): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks