Question

Lowes or Home Depot. Which company would you invest in and why based on financial analysis?

Answer 1

Lowe’s companies inc and home depot inc. both are Trading on the same Stock Exchange NYSE.

Both Companies are in same home of improvement of retail space

RETURNS OF STOCK

In a decade the returns of both are as under

Home Depot’s Stock : 755%

Lowe’s Company’s stock : 431%

TURNOVER

The Turnover is Important for the Retail Compaies

Home Depot’s Stock : 110225 million

Lowe’s Company’s stock : 72148 million

NET EARNINGS

Not only turnover of the of home depot is better but also better margin on sales. The

The Net earnings of companies of their sales are under

Home Depot’s Stock : 11242 million

Lowe’s Company’s stock : 4278 million

DEBT

Debt is also important for companies. Long term Debt for 2019 are as under

Home Depot’s Stock : 28670 million

Lowe’s Company’s stock : 2972 million

Home Depot has higher debt But it also generates more revenue compare to Lowe’s Inc

LEVERAGE

Leverage can be a good thing for a company like Lowe's when the economy is good, which it has been for more than a decade. But if the economy takes a turn for the worst, Lowe's would be in the most trouble out of these two.

Home Depot has better margins, less debt, and a better dividend for investors. It's hands down the better stock between these two, and I think this is one retailer that's built to last. It's not losing sales to online competitors the way many big box retailers are, and it has loyal customers who aren't moving to competitors like Lowe's.

I think Home Depot's outperformance is set to continue for a long time, and that makes it a great stock to buy today.