<b>Lowe's Dividend Wins Out Over Home Depot in Housing Slowdown</b>

The housing market slowdown affects both Home Depot and Lowe's, but one company's dividend may be more resilient in this environment. According to recent data, Lowe's has a higher free cash flow yield of 6.93% compared to Home Depot's 4.11%. This means that Lowe's generates more cash flow per dollar of dividend paid.

Home Depot has focused on attracting professional contractors, with a successful pivot driving 1.7% comparable sales growth. However, its free cash flow declined by 22%, and the payout ratio sits higher compared to Lowe's. In contrast, Lowe's' steady raises from $1.05 to $1.25 quarterly suggest a longer dividend growth runway.

While both companies face challenges due to low housing turnover, Lowe's has more exposure to discretionary DIY customers who are cutting back first. CEO Marvin Ellison acknowledged that 'discretionary DIY demand remains under pressure', with comparable sales growing only 0.2%. In a frozen housing market where repair and small-ticket work carries the load, Home Depot's customer mix may have an advantage.

Home Depot has paid dividends for 156 consecutive quarters, but growth has decelerated to a token bump. Lowe's, on the other hand, is raising faster off a lower payout ratio, earning it Aristocrat status.