Tractor Supply vs Lowe's Which Is a Smarter Choice?

Tractor Supply and Lowe's are two well-known companies in the retail industry, each offering a variety of products for home improvement and landscaping needs. Despite their similar focus, the two companies differ in their approaches to business. Tractor Supply focuses more on rural consumers, offering agricultural supplies and equipment, while Lowe's caters to a more general DIY and home improvement market. Investors looking to compare the performance of Tractor Supply and Lowe's stocks will find differences in their financials and market strategies.

Tractor Supply or Lowe's?

When comparing Tractor Supply and Lowe's, 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 Tractor Supply and Lowe's.

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. Tractor Supply has a dividend yield of 1.93%, while Lowe's has a dividend yield of 1.72%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Tractor Supply reports a 5-year dividend growth of 27.98% year and a payout ratio of 41.93%. On the other hand, Lowe's reports a 5-year dividend growth of 19.29% year and a payout ratio of 37.18%.

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 Tractor Supply P/E ratio at 27.61 and Lowe's's P/E ratio at 21.71. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Tractor Supply P/B ratio is 13.42 while Lowe's's P/B ratio is -11.08.

Growth Investors:

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

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $283.70 for Tractor Supply and $262.07 for Lowe's. Over the past year, Tractor Supply's prices ranged from $209.00 to $307.64, with a yearly change of 47.20%. Lowe's's prices fluctuated between $209.55 and $287.01, with a yearly change of 36.96%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.