A friend of mine dated someone once who bought him a birthday present, like any significant other would.
Well, when he received a gift card for Lowe’s instead of Home Depot, he broke up with her.
The explanation was simple.
He told me if she didn’t know that he preferred Home Depot, she didn’t know him at all.
Which led to a follow-up question: What’s the difference between the two stores?
He didn’t give me an answer.
But I made a mental note to only buy him gift cards from the store with the orange aprons.
Then I did my own research to find an answer.
I discussed the similarities between the two stores’ holiday merchandise this year.
Today I will dive into the differences between the two home improvement stores.
Home Depot Inc. (NYSE: HD) rates a “Bullish” 61 out of 100 on our proprietary Stock Power Ratings system.
Let’s get started.
Home Depot Is for the Professionals
Home Depot and Lowe’s are the world’s two largest home improvement retailers.
They compete for the same customer base by selling home improvement merchandise. But that’s where the similarities stop.
Home Depot stands out through supply chain strategies and branding.
A top priority for Home Depot’s management is modernizing its supply chain.
In 2020, the company invested $1.2 billion to improve its distribution across the U.S. to speed up the delivery of construction and building materials.
Home Depot aims to reach 90% of U.S. customers with same-day and next-day delivery in the coming years.
Regarding branding, Home Depot stands out through its professional and industrial theme.
Its orange and black color scheme and tall shelves with items only reachable by forklifts enhance the message the company is trying to send: It’s a store geared toward professionals in the home improvement field rather than the DIY-ers.
Let’s look at Home Depot’s stock breakdown to see how it stands compared to its peers in the home improvement retail industry.
Home Depot Stock Power Ratings and Momentum
Home Depot’s overall score loses the war to Lowe’s.
Home Depot rates a “Bullish” 61 out of 100 on our Stock Power Ratings system, whereas Lowe’s rates a 78. (Check out my analysis of LOW stock here.)
This means we expect it to outperform its market peers by 2X over the 12 months.
Let’s take a closer look at HD’s momentum to see where it stands compared to the industry:
HD earns a neutral 59 on our momentum metric.
Broader market headwinds and inflation have crushed Home Depot over the last 12 months.
HD’s stock price pushed 34% lower over the last 12 months.
For reference, its competitor Lowe’s only suffered a 4.8% drop over the same time.
Its industry peers in the home improvement retail industry have lost an average of 15.7%.
That negative momentum shows why HD stock rates a 59 on that factor.
The Bottom Line
Home Depot scores a “Bullish” 61 out of 100 on our Stock Power Ratings system.
However, “Strong Bullish” stocks are no anomaly.
We expect those stocks to beat the broader market by 3X in the next 12 months!
To get one highly rated stock you should consider investing in, check out Matt Clark’s Stock Power Daily.
Monday through Friday, he gives you one stock that scores 80 or above on our system and tells you why you should add it to your portfolio — for free!