Home Depot Vs Lowe’s: Which Company Will Dominate Locked-In Home Improvements?

Brokers are divided over rival US home improvement chains – Lowe’s or Home Depot – which will attract most buyers during the foreclosure period.

Lowe’s apparently made a strong statement by reporting its biggest increase in quarterly same-store sales on Wednesday in at least 15 years, as people spent more on tools and paint on DIY projects and home repairs during downtime. coronavirus.

The chain’s same-store sales jumped 11.2%, while analysts were only expecting a 3.4% increase. The increase was the highest since at least April 2005, according to data from Refinitiv. Net income rose 27.8% to $ 1.34 billion, or $ 1.76 per share, in the first quarter ended May 1.

The home improvement chain also significantly exceeded quarterly profit estimates, a day after its biggest rival Home Depot’s first-quarter profit disappointment.

The Home Depot suspended its outlook for 2020 and also announced on Tuesday that profits were worse than expected in part due to the $ 850 million increase in worker benefits.

The retailer said it reported first quarter profit of $ 2.2 billion, or $ 2.08 per share. That was down from a profit of $ 2.5 billion in the same period last year and below Wall Street’s consensus earnings forecast of $ 2.26 per share.

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Home Depot was up 0.2% to about $ 239 on Wednesday morning, while Lowe’s was up about 1% to $ 118. However, Home Depot’s stock is up nearly 9% year-to-date, while Lowe’s is down just under 1%.

Nancy Tengler, chief investment officer at Laffer Tengler Investments, expects Home Depot shares to continue to outperform Lowe’s.

“We own both, but we own a lot more Home Depot and the reason is twofold,” Tengler told CNBC’s Trading Nation Monday. “First of all, they’re best in class, they have the best locations, frankly the best management team, and they’ve increased the dividend by around 20% every year for the past five years.”

She also pointed out the strong free cash flow of the business and its online sales franchise which is around 20%. Consumers preferred to buy more products online due to the coronavirus pandemic. Amazon stock recently hit an all-time high. If you want Amazon stock trading, we have reviewed a set of online stock brokers.

However, Ari Wald, head of technical analysis at Oppenheimer, said, “We prefer Home Depot stocks. It not only has a stronger long term trend, but we see it as the more tactical idea here. Wald also said the stock is finding support near its 200-day moving average, a key indicator among traders.

According to Wald, Home Depot stock “is currently trying to break past its February peak of $ 247, so I think it’s very telling when you have a stock that’s already approaching new cycle highs with the rest of the market though. well below these peaks. It really is a great demonstration of the relative strength of this title.

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