The home improvement retail sector in the United States is dominated by two giants — The Home Depot Inc. HD and Lowe’s Companies Inc. LOW. As the top players in the industry, both companies serve millions of homeowners, DIY enthusiasts and professional contractors (Pro) across North America. While these companies share a similar customer base and product assortment, their strategic approaches, market positions and financial performances set them apart. With the housing market in flux and consumer spending patterns evolving, a closer look at how each is positioned becomes increasingly relevant for investors.

This face-off dives into the critical factors that define their competition — market share, business strategy, portfolio strength, financial performance and valuation. Whether you are an investor evaluating retail stocks or simply curious about who is winning the home improvement race, this comparison breaks down where each company stands and who might have the upper hand moving forward.

Key Statistics & Market Share: HD Vs LOW

With a commanding market capitalization of $343.9 billion, Home Depot dwarfs Lowe’s, which stands at $120 billion. HD captures an estimated 17% share of the U.S. home improvement market, well ahead of Lowe’s 11%, cementing its dominance and deeper penetration within the industry. In fiscal 2024, Home Depot reported revenues of around $152 billion, nearly double of Lowe’s $87 billion. This wide gap highlights HD’s scale advantage, which enables it to secure more favorable supplier terms, make larger infrastructure investments, and manage costs more efficiently across its vast operations.

Home Depot’s expansive footprint, with around 2,330 stores across North America, strengthens its market position. In contrast, Lowe’s operates roughly 1,740 locations. This broader reach allows HD to better serve the Pro customer base, an essential customer segment that generates higher transaction volumes and more frequent purchases. Home Depot’s net income of $15 billion underscores its superior profitability and operational efficiency compared with Lowe’s $7.7 billion, highlighting its financial strength.

When comparing market share and key financial statistics, Home Depot maintains a clear and commanding lead over Lowe’s in the U.S. home improvement landscape.

Analyzing HD & LOW’s Business Strategies & Portfolio

From a strategic and operational standpoint, Home Depot has adopted a more aggressive approach by heavily investing in logistics, omnichannel integration and supply-chain automation. Its “One Home Depot” strategy has successfully unified digital and physical shopping experiences, providing seamless access for retail consumers and professional contractors. Lowe’s has been undergoing a multi-year transformation plan aimed at simplifying operations, modernizing its technology infrastructure and enhancing overall store productivity to boost efficiency and competitiveness.

In terms of market position and branding, Home Depot has established itself as the industry leader through its consistent focus on innovation, supply-chain efficiency and its deep integration with Pro contractor services. The brand is widely recognized for its reliability among Pros, supported by a robust infrastructure that enables fast, efficient product delivery and service. This alignment with the Pro segment drives higher transaction values and fosters long-term customer loyalty, giving HD a strong competitive edge.

In contrast, Lowe’s positions itself as a more consumer-centric brand, focusing on aesthetically curated in-store experiences, stylish product displays and strength in categories like appliances, lighting and home décor. While this appeals strongly to the DIY demographic, Lowe’s continues to lag behind Home Depot in the Pro segment, wherein factors like bulk availability, inventory consistency and rapid fulfillment are key.

While Lowe’s has made notable progress, especially in margin expansion and return on invested capital, it still trails Home Depot in areas like Pro penetration and supply-chain sophistication. Home Depot’s deeper penetration into the Pro contractor market strengthens its brand positioning and customer stickiness.

How Does Zacks Consensus Estimate Compare for HD & LOW?

Home Depot’s fiscal 2025 revenues are projected to grow 2.7% year over year to $163.8 billion and EPS is expected to decline 1.7% year over year to $14.98. HD’s EPS estimates for fiscal 2025 moved down 3.9% in the last 60 days. Home Depot’s annual sales and earnings are slated to increase 4.3% and 10.2% year over year, respectively, in fiscal 2026.

HD’s Estimate Revision Trend

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Meanwhile, Lowe’s fiscal 2025 sales are expected to increase 0.8% year over year to $84.3 billion and EPS is anticipated to rise 2.3% to $12.28. LOW’s EPS estimates for fiscal 2025 have moved down 2.1% in the past 60 days. Lowe’s annual sales and earnings are slated to increase 3.5% and 9.9% year over year, respectively, in fiscal 2026.

LOW’s Estimate Revision Trend

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This clearly illustrates that both Home Depot and Lowe’s have witnessed downward estimate revisions in the past 60 days. However, Lowe’s estimates indicate year-over-year increases in sales and earnings for fiscal 2025, whereas HD’s EPS estimates suggest declines.

Price Performance & Valuation Comparisons of HD & LOW

Over the last year, the HD stock had the edge in terms of performance, having a total return of 3.9%, including dividends. This has noticeably lagged the benchmark S&P 500’s return of 5.7% but has outperformed Lowe’s 6.3% decline.

One-Year Price Performance

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From a valuation perspective, Home Depot trades at a forward price-to-earnings (P/E) multiple of 22.61X, which is above its 5-year median of 22.23X, and Lowe’s is trading at 17.11X, below its 5-year median of 17.59X.

Home Depot stock seems pricey. Its premium valuations reflect its superior alignment with Pro customers, and well-recognized and trusted private-label portfolio, reinforcing its market leadership. If the company sustains its aggressive focus on Pro contractors and investments in supply-chain efficiency, the premium could be warranted.

Conversely, Lowe’s stock looks cheap from a valuation perspective. LOW has made significant strides in recent years by refining its operations, expanding its Pro segment and enhancing digital capabilities, aiming to close the gap with its bigger rival, highlighting its growth prospects. Lowe’s appears more attractively valued on a relative basis, suggesting an upside if execution improves.

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Dividend Analysis: HD & LOW

Apart from stability and growth potential, Home Depot and Lowe’s tend to attract investors with their strong record of paying out regular dividends. These companies have consistently raised dividend payouts, reflecting their confidence in their earnings growth potential.

Home Depot offers a dividend yield of 2.66%, supported by a payout ratio of 59%, signaling a balance between rewarding shareholders and reinvesting in the business. HD has a five-year dividend growth rate of 10.6%. (Check HD’s dividend history here)

Lowe’s, with a dividend yield of 2.15% and a lower payout ratio of 38%, provides more room for dividend growth. LOW has a five-year dividend growth rate of 19.1%. (Check LOW’s dividend history here.)

Overall Edge: Home Depot or Lowe’s?

Home Depot continues to assert its dominance in the home improvement sector through its superior market share, robust strategy execution and deep-rooted brand loyalty, particularly within the high-value Pro customer segment. These strengths make Home Depot a durable, cycle-resistant business with strong long-term appeal, particularly for growth-oriented investors seeking stability and consistency.

Meanwhile, Lowe’s is far from just a second-place competitor. It has made meaningful strides in narrowing the gap. The company’s ongoing transformation has led to operational efficiencies, improved digital capabilities and deeper inroads into the Pro market. While it still trails HD in scale and brand strength, Lowe’s is showing momentum wherein it matters. From a valuation perspective, LOW trades at a more favorable P/E multiple and offers higher dividend growth potential, making it an attractive option for value-focused investors willing to capitalize on its continued execution and margin improvement.

Ultimately, both companies bring distinct strengths to the table. Home Depot is the go-to choice for investors seeking scale, dependability and leadership in a defensive sector, whereas Lowe’s offers a compelling value proposition with room for catch-up growth. For a well-balanced portfolio, both stocks can play a role — HD for reliable performance and LOW for potential upside as its transformation gains traction.

Both HD and LOW currently carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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