I suppose setting up rivalries can be fun, but the whole Home Depot
For those who would suggest that home improvement retailing ultimately has to be like Highlander ("in the end, there can be only one."), I'd observe that Wal-Mart
All that said, it's clearly true that Lowe's is the pluckier and faster-growing of the two concepts. Sales in the fourth quarter climbed more than 26% (nearly 8% on a comp-store basis), and earnings per share rose nearly 36%. Those numbers certainly outstrip what Home Depot managed to accomplish.
And there are aspects of Lowe's model that seem to be working better than Home Depot's. Lowe's is generally considered superior in customer service, and its notion of trying out metro/urban stores is interesting.
By the way, Home Depot still has superior returns on capital. It also has a leg up on international expansion and is moving aggressively into service businesses and MRO/industrial supply. In this Fool's opinion, comparing Home Depot and Lowe's is no longer a fair straightaway comparison.
I like both companies. The Lowe's model works well, and it's unlikely that Home Depot will ever see this sort of growth again. That said, Home Depot still looks like the better value to me, and to the Motley Fool's Inside Value newsletter, at today's prices. But I can certainly understand why more growth-oriented investors may lean toward Lowe's today.
For more Foolish thoughts on the big retailers:
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Fool contributor Stephen Simpson has no financial interest in any stocks mentioned (that means he's neither long nor short the shares).
