She's long both names, but their margins are getting squeezed. It's not an ideal place to be now. The backdrop are rising mortgage and interest rates. Mortgage rates just hit 7%.
Lowes trades at a discount in terms of PE, while Home Depot is at a slight premium. He likes Lowes for their commitment to digital-commerce and customer loyalty.
(A Top Pick Aug 09/22, Down 3.5%)Stockchase Research Editor: Michael O'Reillu Our PAST TOP PICK with LOW is progressing well. We now recommend to trail up the stop from $172 to $180.
LOW vs. HD Not sure you want to own either right now. For example, HD fell markedly yesterday with the inflation print. Don't add here. Go for names that benefit from higher rates.
(A Top Pick Aug 18/21, Up 8%) It's well-managed. They're expanding margins. In this sector, transactions were down, but profits were up, because the average price is up. In this case, inflation can be your friend. He expects good things tomorrow when they report.
Stockchase Research Editor: Michael O'Reilly This dividend Aristocrat trades at 16x earnings compared to peers at 33x. It has increased dividends for 48 consecutive years and boasts a payout ratio under 35% of cash flow. An aging home inventory suggests future home improvement demand should be sustained, even during a market down turn. We recommend a stop loss at $172, looking to achieve $238 -- upside potential over 21%. Yield 2.11% (Analysts’ price target is $237.53)
Trading off on fear that Fed will extinguish economic expansion. Very well managed. Increased guidance. Increasing margins steadily. Operating margins grew from 10% to almost 14%, and have a ways to go. Outperforming HD. Yield is 1.61%. (Analysts’ price target is $275.08)
(A Top Pick Mar 19/21, Up 25%) Little brother of HD, and following the HD playbook. Rising margins, latest quarter was great. Since he switched out of HD, it's up 20%, whereas LOW is up 33%.
Don't fear a shutdown, but a slowdown due to the new Omicron variant. Don't fear a shutdown, but a slowdown due to the new Omicron variant. Lowes as well as Home Depot and Tractor Supply reported good earnings. The group will benefit from a slowdown. Lowes was slow to run up vs. these peers, and is still cheaper than HD
They've followed the HD playbook. Strong organic growth. Grew revenues 33% over the last 2 years, amazing for a large company. Multiple at 21x is less than HD. Good value for a fast-growing enterprise. Right in the bullseye of spending, for individuals and for pros.
If HD gets hit again when it reports Tuesday, it'll likely pressure Lowe's, which is the time to pounce on this. Lowe's is the better operator due to the CEO's incredible turnaround. They report Wednesday, and he expects them to report a strong quarter and upbeat holiday forecast.
Question about Home Depot He owned this from the late-1990s till 2020 and did a 10-bagger. He sold it not because of the dividend, but a comparison against Lowe's. HD's success largely was a result of organic growth and operating efficiencies. In the past decade, their operating margins moved from 11% to 16.5% vs. Lowe's in a similar, but slower rate. So, he'd rather capture what will come, so he switched to Lowe's.
Allan Tong’s Discover PicksLowe’s company boasts 35.1% YOY same-store sales growth and a 69% leap in quarterly profits. The company plans to expand online sales and add private brands. True, DIY customers shopped a little less this spring, but those folks were spending more on big-ticket items. Shares of LOW popped 4% immediately after that report. The street still believes in the name at seven buys and three holds at a price target of nearly $230 that’s over 12% higher than the current level. Home Depot boasts eight buys and one hold at a price target about 11% higher at $363.43. Read 3 Recovering Stocks to Consider for our full analysis.
Lowes Companies Inc. (LOW) Frequently Asked Questions
What is Lowes Companies Inc. stock symbol?
Lowes Companies Inc. is a American stock, trading under the symbol LOW (previously LOW-N on Stockchase) on the New York Stock Exchange (LOW). It is usually referred to as NYSE:LOW or LOW