Lowe’s Companies, Inc. (LOW) and The Home Depot, Inc. (HD): What’s the Difference?

Industry Outlook

Overall, the state of the home-improvement industry continues to improve. While it may be premature to call the future “bright” for companies like Lowe’s Companies, Inc. (NYSE:LOW) and Home Depot, it is clear that well-run retailers have a place in the portfolios of value-minded investors. As existing home sales increase, more and more Americans will need to make significant outlays to refurbish and update their homes in preparation for listing. At the same time, small-scale commercial home builders and contracting companies that source many of their materials at Lowe’s and Home Depot will increase the frequency and scope of their trips to these stores.

Invest or Stay Away?

Given all of the factors that favor the home-improvement space, investors have every right to look seriously at these two companies. In the end, the final buying decision is likely to come down to price: Lowe’s Companies, Inc. (NYSE:LOW) still appears fairly cheap compared to its larger rival. With both companies offering yields of about 1.5 percent, investors may wish to bet that Lowe’s can recover from its recent hiccup and post better-than-expected numbers in the coming quarters. Likewise, market-watchers might determine that Home Depot’s stock price is ripe for a period of consolidation after hitting fresh all-time highs.

However, every investor’s calculation is likely to be different. Both of these companies offer clear value. Moreover, they’re well-positioned in an industry that looks poised to grow. Although there are no “sure things” in the world of investing, Lowe’s and Home Depot both appear to be on the right track.

The article Lowe’s and Home Depot: What’s the Difference? originally appeared on Fool.com.

Mike Thiessen has no position in any stocks mentioned. The Motley Fool recommends Home Depot and Lowe’s.

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