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Home Depot (NYSE:HD) reported earnings last week. Lowe's (NYSE:LOW) reported earnings this week. Where do you prefer to shop?

Real Estate and Homebuilding related stocks have been a great area to be invested in so far in 2012. The Homebuilder ETF (NYSEARCA:XHB) is up almost 35% year-to-date, while single family homebuilder, Pulte Homes (NYSE:PHM) has more than doubled.

You can argue with the voracity of the rebound in the real estate, but it is hard to argue with the returns listed above. The bottom line is this: this has been one of the leading sectors in the market in 2012. Property REITs have done well, Mortgage REITs have done well, Homebuilders have done well, and Building related stocks have been a good place to be.

Home Depot and Lowe's are great proxies for this sector. They are basically in the same exact business. Yet, one is a Best Stock Now and the other is not. What is my definition of a Best Stock Now? Let's compare the two stocks side by side:

Data from Best Stocks Now app

Over the last 10 years, Lowe's has delivered a total average return of 5.4% per year, while Home Depot has delivered 9.7% per year. By contrast, the S&P 500 has delivered 4.3% per year-advantage Home Depot.

Over the last five years, Lowe's has delivered an average total return of 2.6%, while Home Depot has delivered 14.9%. By contrast, the S&P 500 has delivered an average return of -0.4% -- big advantage Home Depot!

Over the last three years, Lowe's has delivered an average total return of 13.0% per year, while Home Depot has delivered 33.4%. The S&P 500 has delivered an average of 13.1% -- another big advantage to Home Depot.

Over the last 12 months Lowe's is up 41.8% (I told you this has been a good sector!), while Home Depot is up 74.5%. By contrast the S&P 500 is up 18.8% -- another huge win for the Depot!

In 2008, when the market was down 38.5%, Lowe's was down only 3.3% while Home Depot was down 11.4% -- finally, a small win for Lowe's.

When I compare the short-term, intermediate-term and long-term performance of Lowe's against the other 2,868 stocks that I follow, it earns a performance grade of C-. When I do the same for Home Depot, it earns a performance grade of B.

Now, what about valuation? I like to look at performance, safety, and valuation in my stock selection process.

Data from Best Stocks Now app

Lowe's is currently trading at 12.7 times forward earnings, while Home Depot is trading at 16.9 time forward earnings.

Lowe's is expecting to grow their earnings by about 17% per year over the next five years, while Home Depot is expected to grow by about 15% per year.

Keep in mind however, that over the last five years, Lowe's earnings have been shrinking by 5% per year, while Home Depot's earnings have been growing by 5% per year. Do the analysts have future earnings right?

Lowe's has a PEG ratio of 0.74, while Home Depot has a PEG ratio of 1.13. I give Lowe's a value grade of B and I give Home Depot a value grade of B-. On the surface, Lowe's is the cheaper stock.

I like to buy and own stocks with great performance. I also like to own them when they make sense from a valuation point of view.

Just like a baseball team, I want to have the 25 or so best stocks that I can find to fill up my roster (portfolio). Is either of these stocks a Best Stock Now?

Data from Best Stocks Now app

When I rank the performance and valuation of Lowe's, I get an overall grade of B and a stock that is ranked at #881 out of the 2,868 stocks that I follow.

When I do the same for Home Depot, I get an overall grade of A- and a stock that is ranked at number #73 overall.

If I am a conservative growth, large-cap investor, Lowe's is not a Best Stock Now while Home Depot is.

Which one do you prefer to shop at? It appears that more consumers are choosing Home Depot over Lowe's. It is also obvious that Home Depot has better management.

Source: Lowe's Vs. Home Depot