■ Analysis · August 15, 2026
Home Depot vs. Lowe's: Dividend Growth and Valuation Compared
Home Depot and Lowe's have both raised dividends for 17 straight years. Lowe's offers faster dividend growth and a lower P/E, while Home Depot has a higher yield.
Dividend Histories and Current Yields
Home Depot and Lowe's have long been the dominant players in the U.S. home improvement sector. Both companies have raised their dividends for 17 consecutive years, though Home Depot paused increases between 2006 and 2010. As of the latest data, Home Depot pays an annual dividend of $9.32 per share, yielding 2.7%. Lowe's pays $5.00 per share annually, yielding 2.2%.
Recent Performance and Growth
In the first quarter of 2026, Lowe's reported net sales growth of 11%, significantly outpacing Home Depot's 5% increase. Analysts expect this trend to continue in the second quarter, with Lowe's projected to see a 9% rise in net sales versus 4% for Home Depot. Lowe's has focused on improving supply chain efficiency, store layouts, and inventory management, which appears to be paying off.
Over the past five years, Lowe's stock has delivered higher overall returns compared to Home Depot. Additionally, Lowe's most recent dividend increase was 4.2%, while Home Depot's was only 1.2%.
Valuation Comparison
From a valuation standpoint, Lowe's trades at a price-to-earnings (P/E) ratio of 18, notably lower than Home Depot's 24. This suggests that investors are paying less for each dollar of earnings at Lowe's, potentially offering a more attractive entry point.
Both companies face slower growth due to market saturation in the U.S. and limited international expansion. However, Lowe's appears to be executing better operationally, with faster sales growth and a more favorable valuation.
What it means for income investors
For income-focused investors, the choice between Home Depot and Lowe's involves trade-offs. Home Depot offers a higher current yield, but Lowe's provides faster dividend growth and a lower valuation. These factors may influence long-term total returns, but individual circumstances will determine which stock fits better in a portfolio.
Reporting based on: The Motley Fool. Figures verified against market data where available.