Lowe's Dividend Outshines Home Depot Amid Housing Slowdown

The housing market slowdown has taken its toll on two major home improvement retailers: Home Depot and Lowe's. Both companies have been punished, with Home Depot down 19.28% over the past year and Lowe's sliding 20.9%. Despite this, one dividend stands out as stronger under the hood.

Lowe's has raised its dividend by a full 4% this cycle, pushing the annualized forward dividend to $5.00 per share. This is more than triple Home Depot's percentage raise, which came in at around 1.3%. Lowe's fiscal 2026 adjusted EPS guidance of approximately $12.25 implies a payout ratio near 41%, well below Home Depot's 63%.

Lowe's cash generation also widens the gap further. The company produced $3.1 billion in free cash flow in Q2 alone against $673 million in dividends paid, a coverage ratio north of four times. In contrast, Home Depot's dividend bill is larger in absolute terms, with approximately $2.3 billion in dividends paid during Q2.