Buy Home Depot or Lowe's Stock Ahead of Much-Anticipated Q3 Results?

Anticipation is building for next week's blockbuster earnings lineup, featuring entertainment giant Disney DIS) and AI powerhouse Nvidia NVDA), with Wall Street closely watching the latter amid uncertainty following Jensen Huang's abrupt resignation as CEO.

Home improvement giants Home Depot HD) and Lowe's LOW) will also take center stage, with investors looking for signs of improving demand amid a sluggish housing market, elevated mortgage rates, and persistent affordability challenges.

With both companies preparing to report third-quarter results, let's compare their earnings expectations, stock performance, valuations, and dividends to determine which may be the better investment.

Home Depot & Lowe's Q3 Expectations

Home Depot reports Tuesday, November 17, before the opening bell. The Zacks Consensus Estimate calls for Q3 earnings of $3.87 per share, up 3% year over year, on revenue of $42.72 billion, a similar increase.

Lowe's reports Wednesday, November 18, before the market opens. The Zacks Consensus Estimate projects revenue to rise more than 7% to $22.38 billion, although earnings are expected to decline over 6% to $2.86 per share amid what has been a tougher operating environment.

Both companies will be closely scrutinized for updates on comparable-store sales, professional contractor demand, and full-year guidance. Home Depot's larger Pro business provides some resilience, while Lowe's continues to expand its professional customer base to offset softer do-it-yourself (DIY) spending.

Stock Performance & Valuation Comparison

Home Depot has outperformed Lowe's in 2026, posting a year-to-date total return of roughly 4% compared with a nearly 4% decline for LOW.

Over the last three years, HD has also outperformed LOW, generating a 24% total return compared with 19% for Lowe's. That said, both have noticeably trailed the broader market despite outperforming their Zacks Retail-Home Furnishings industry.

At current levels, Lowe's has the more attractive valuation, trading at 17X forward earnings compared with Home Depot's 22X, while the Zacks Retail-Home Furnishings industry average sits at 20X.

Lowe’s discount may appeal to value-oriented investors, although Home Depot's stronger professional contractor business helps justify its premium.

HD & LOW Dividend Comparison

Both companies have impressive dividend histories, although Home Depot currently offers the more generous yield.

Home Depot pays a quarterly dividend of $2.33 per share, translating to an annual payout of $9.32 and a yield of nearly 2.7%. Lowe's pays $1.25 quarterly, equating to $5 annually and a yield near 2.2%.

Notably, Lowe's is a Dividend King, increasing its dividend for more than 50 consecutive years and making it an appealing long-term dividend growth investment. Still, Home Depot offers higher immediate income and has increased its dividend for 17 consecutive years.

Bottom Line: Should Investors Buy HD or LOW Stock?

Home Depot's stronger recent performance, professional contractor exposure, and higher dividend yield make it the more compelling choice for stability and income. Conversely, Lowe's discounted valuation offers greater upside potential if housing demand rebounds.

For now, Home Depot and Lowe's both land a Zacks Rank #3 (Hold), suggesting investors may want to remain patient before aggressively buying either stock ahead of earnings.

Encouraging Q3 results and improving housing-market trends could strengthen the investment case for both home improvement giants, although a sustained recovery may depend on lower interest rates.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research