Let me let you in on a little-known fact, home improvement stocks are Wall Street’s best-kept secret. Here’s why: In good economies where unemployment is low, U.S. homeowners spend billions improving their homes. Every homeowner seeking to sell their home knows the biggest value comes from improving the kitchen and bathroom. In recent years Lowes Companies, Inc. (LOW) and Home Depot Inc. (HD) have experienced a surge in sales as it relates to kitchen and bathroom remodeling. A part of what has fueled this revolution is television networks like HGTV, TLC and DIY Network.
Shareholders can profit big from the new ways of home improvement. How can a stock market investor like you profit big? The answer is simple: Owning shares in Lowes and Home Depot. As a shareholder there are distinct differences between these two companies that you should be aware of. Home Depot is a master of logistics. Here is what that means: Because of the recent tragedies across the US including the California wildfires in 2018, and Florida’s Hurricane Irma and Texas’ Hurricane Harvey in 2017, Home Depot has learned that their stores are where local contractors and builders get materials when they are needed most. The sales and marketing team at Home Depot have perfected setting up command centers around areas that are experiencing nature’s wrath. These crisis command centers can quickly monitor how much lumber, steel, siding and roofing materials are needed within 72 hours of a major tragic event. By quickly supplying their local stores with needed material, they get a jump on their biggest competitor, Lowes. In the case of Home Depot, mastering logistics by selling materials to regional areas when they are in need has significantly boosted the company’s top-line revenue.
Looking at the stock charts below, the five-year performance of these two stocks will show you which one Wall Street favors.
5-Year Lowe's Companies, Inc. (LOW) Chart
