Home Depot Bests Lowe's on Key Metrics Amid Stagnant Housing Market

Home Depot (NYSE:HD) and Lowe's (NYSE:LOW) are two of the largest home improvement retailers in the US, but they have been struggling with a stagnant housing market. Existing home sales dropped to 3.98M annualized in August, the lowest reading in the past year, and housing starts slipped 2.6% to 1.27M.

Despite facing similar challenges, Home Depot has outperformed Lowe's on several key metrics, including demand trends, balance sheet safety, and dividend payments. In Q2, Home Depot's comps rose 1.7%, while Lowe's posted a mere 0.2% increase. July comps accelerated to 2.3% for Home Depot, but fell 1.2% for Lowe's.

Home Depot's balance sheet is also stronger, with a lower debt-to-EBITDA ratio of 2.65 compared to Lowe's 3.54. This means that Home Depot has more financial flexibility and can weather potential economic downturns better than its competitor.