HD vs LOW: Dividend Yield, Growth & Safety Comparison
Home Depot, Inc. (HD) and Lowes Companies Inc (LOW) are both in the Consumer Discretionary sector, making them natural rivals for dividend investors. HD edges ahead on yield at 2.35% versus LOW's 1.65%. LOW holds the edge in dividend safety with a "Safe" rating.
Key Metrics Comparison
| Metric | HD | LOW |
|---|
| Dividend Yield | 2.35% | 1.65% |
| Annual Dividend | $9.20 | $4.70 |
| 5-Year CAGR | N/A | 20.9% |
| Payout Ratio | 62% | 39% |
| Consecutive Years | N/A | 0 |
| Price | $390.99 | $286.71 |
Yield Comparison
Home Depot, Inc. (HD) currently yields 2.35%, which is solid for the broader market. That's 0.70% more than Lowes Companies Inc (LOW), which yields 1.65%. In dollar terms, HD pays $9.20/share annually versus LOW's $4.70/share.
Dividend Growth
LOW has a 5-year dividend CAGR of 20.9%. Growth data is not available for HD. LOW: Dividend growth is slowing — the 3-year CAGR of 20.3% trails the 5-year rate of 20.9% and the 10-year rate of 19.0%.
Dividend Safety
HD's dividend safety is rated "Moderate." The payout ratio of 62% is moderate. The dividend is currently covered by earnings but leaves less room for growth. LOW's dividend safety is rated "Safe." The payout ratio of 39% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.6x. LOW's payout ratio of 39% is more conservative than HD's 62%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in HD generates approximately $235/year in dividend income, compared to $165/year from LOW — a difference of $70/year. At $100,000, that gap widens to $700/year.
Verdict
- Best for income: HD
- Best for safety: LOW
Frequently Asked Questions
Which has a higher dividend yield, HD or LOW?
Home Depot, Inc. (HD) has a higher dividend yield of 2.35% compared to Lowes Companies Inc (LOW) at 1.65%.
Which is safer for dividend income, HD or LOW?
Home Depot, Inc.'s dividend safety is rated "Moderate" while Lowes Companies Inc is rated "Safe." The payout ratio of 62% is moderate. The dividend is currently covered by earnings but leaves less room for growth. The payout ratio of 39% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.6x.
How much income does $10,000 in HD vs LOW generate?
A $10,000 investment in HD generates approximately $235/year in dividends, while the same amount in LOW generates about $165/year.
Which has a lower payout ratio, HD or LOW?
Lowes Companies Inc has a lower payout ratio of 39% compared to Home Depot, Inc.'s 62%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
HD vs LOW: which is better for retirement income?
It depends on your priorities. HD for current income, LOW for safety. Many retirement investors hold both for diversification.
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