Lowe's vs Tractor Supply Which Offers More Value?

Lowe's and Tractor Supply are both big players in the home improvement and lawn and garden retail sectors, but they cater to slightly different markets. Lowe's is a leading home improvement retailer with a focus on DIY enthusiasts and professionals, while Tractor Supply Company specializes in rural lifestyle needs such as farming and ranching. Investors looking to capitalize on the growth potential of the home improvement industry may consider comparing the stocks of these two companies to determine which one offers the best investment opportunity.

Lowe's or Tractor Supply?

When comparing Lowe's and Tractor Supply, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Lowe's and Tractor Supply.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Lowe's has a dividend yield of 1.65%, while Tractor Supply has a dividend yield of 1.95%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Lowe's reports a 5-year dividend growth of 19.29% year and a payout ratio of 37.18%. On the other hand, Tractor Supply reports a 5-year dividend growth of 27.98% year and a payout ratio of 41.93%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Lowe's P/E ratio at 22.64 and Tractor Supply's P/E ratio at 27.27. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Lowe's P/B ratio is -11.56 while Tractor Supply's P/B ratio is 13.26.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Lowe's has seen a 5-year revenue growth of 0.69%, while Tractor Supply's is 1.07%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Lowe's's ROE at -48.23% and Tractor Supply's ROE at 50.19%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $272.57 for Lowe's and $281.18 for Tractor Supply. Over the past year, Lowe's's prices ranged from $196.32 to $287.01, with a yearly change of 46.19%. Tractor Supply's prices fluctuated between $197.91 and $307.64, with a yearly change of 55.44%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.