Home Depot and Lowe’s describe themselves in their latest Form 10-K filings as the world’s largest and second largest home improvement retailers, and they are a natural big-box pair in net lease. Both carry investment grade ratings: S&P rates Home Depot A, and Lowe’s senior debt is rated BBB+/Baa1 by S&P and Moody’s (Form 10-Q for the quarter ended July 31, 2026). Their stores sit on large parcels, some of them ground leased, so deals are often large. This comparison follows the investment grade guide framework: rating, lease, real estate, then price.
Head-to-Head
| Lowe’s | Home Depot | |
|---|---|---|
| S&P | BBB+ (senior debt) | A |
| Moody’s | Baa1 (senior debt) | A2 |
| Stores | 1,761 retail stores (July 31, 2026) | 2,364 stores, including 325 in Canada and Mexico (August 2, 2026) |
| Median asking cap rate (listings we track) | n/a (2 listings) | 5.35% (5 listings) |
| Structures | Varies (ground lease or building lease); confirm in each lease | Varies (ground lease or building lease); confirm in each lease |
| Ticker | LOW (NYSE) | HD (NYSE) |
Store counts from each company’s Form 10-Q for its second fiscal quarter of 2026. Lowe’s ratings are senior debt ratings as disclosed in its Form 10-Q; Home Depot rating sources are on its profile. Cap rates are live asking cap rates on listings InvestmentGrade.com tracks, and a median is shown only when at least three listings report a cap rate. The Home Depot figures cover listings of Home Depot store properties; as of October 8, 2026, they did not include properties leased to its distribution subsidiaries.
Credit Ratings
On the S&P scale, Home Depot is rated A, which is investment grade but not the highest among national retailers: S&P rates Walmart AA and Costco AA. Lowe’s senior debt is rated BBB+ by S&P and Baa1 by Moody’s (Form 10-Q for the quarter ended July 31, 2026), above the BBB‑ and Baa3 investment grade thresholds and, on the S&P scale, below Home Depot. Both companies have issued senior notes (fiscal 2025 Form 10-K filings). See the Home Depot and Lowe’s profiles and the tenant ratings database.
Cap Rates
| Tenant | S&P / Moody’s | Median asking cap rate | Middle half of listings | Listings | Median vs. 10-year Treasury |
|---|---|---|---|---|---|
| The Home Depot | A / A2 | 5.35% | 5.35% to 5.80% | 5 | +11 bps |
Active listings InvestmentGrade.com tracks with an asking cap rate (stated in the listing, or computed from its stated income and price when no rate is stated), listings last observed October 12, 2026. Asking cap rates are not closed-sale cap rates. The middle half is the range from the 25th to the 75th percentile of listings. The 10-year Treasury yield is 5.24% as of October 1, 2026 (FRED series DGS10). Ratings are the agency ratings in our ratings database for the entity shown, which may be a parent company; the rating type (for example issuer, senior unsecured debt, long-term debt or revenue bond ratings) varies by company and is shown on each tenant page. A rating applies to a lease only if the rated entity signs or guarantees it, so confirm the tenant and any guarantor in the lease. n/a means no verified rating is on file. Not shown because fewer than 3 active listings with a published cap rate were observed: Lowe's.
As of October 8, 2026, the listings InvestmentGrade.com tracks included six Home Depot store listings and two Lowe’s listings, so one listing can move a median. The table omits a tenant’s median when fewer than three of its listings report a cap rate, and this page does not compare medians on smaller samples. Remaining term, ground lease versus fee simple, rent level relative to market and the strength of the retail corridor can each affect pricing alongside the rating. Compare any offering with recent sales of the same tenant and structure.
Lease Structure and Real Estate
Initial terms and renewal options vary by lease, so confirm them in the lease; some deals are ground leases in which the tenant owns the building and the investor owns the land. As of October 8, 2026, three of the Home Depot and Lowe’s store listings InvestmentGrade.com tracks were marketed as ground leases, four as not ground leases and one did not state its structure; these are listing descriptions, not reviewed leases. Rent increase schedules differ by lease, from periodic fixed increases to bumps at renewal options; read the rent schedule rather than assuming a pattern for either brand.
The land under these stores can be among the larger commercial parcels in its trade area, which can support residual value. But a building of more than 100,000 square feet can have few like-for-like replacement tenants, so the stability of the tenant’s credit is a central part of the underwriting.
Bonds vs. Real Estate
Because both companies issue investment grade bonds, investors can compare a property’s cap rate with the tenant’s bond yields. A net lease can add rent increases, depreciation on owned improvements (land is not depreciable, IRS Publication 946), possible tax deferral when real property held for business or investment use is exchanged for like-kind real property (IRC 1031(a)(1)) and residual land value, but also property-level risks bonds do not carry. This is general information, not tax advice. The 10-year Treasury is 5.24% and the ICE BofA US Corporate Index (investment grade) yields 5.99% as of October 1, 2026. See Lowe’s bonds vs. NNN, Home Depot bonds vs. NNN and the investment grade bonds hub.
Which Fits Your Mandate
- Home Depot fits buyers who prioritize the higher S&P rating.
- Lowe’s remains investment grade credit, rated above the floor, and may offer stronger rent growth where a specific lease has better increases.
With few listings at a time, compare whichever properties are available in your target market on their leases and real estate. See also Tractor Supply vs. Home Depot and Walmart vs. Costco.
Evaluating a Big-Box Net Lease Acquisition?
We can compare specific Lowe’s and Home Depot offerings against current listings and recent sales. On the majority of transactions, there is no separate fee to you as the buyer for representation; the listing broker pays a cooperating commission.
Frequently Asked Questions
What credit ratings do Lowe’s and Home Depot have?
S&P rates Home Depot A; for Moody’s, our ratings database shows A2. Lowe’s senior debt is rated BBB+ by S&P and Baa1 by Moody’s (Form 10-Q for the quarter ended July 31, 2026). Both are investment grade, and on the S&P scale Lowe’s is rated below Home Depot.
Is Home Depot the highest-rated retail tenant?
No. S&P rates Home Depot A and rates Walmart and Costco higher, at AA and AA.
Are Lowe’s and Home Depot properties ground leases?
Some are ground leases in which the tenant owns the building and the investor owns the land, and fee simple net leases also trade. As of October 8, 2026, three of the Home Depot and Lowe’s store listings InvestmentGrade.com tracks were marketed as ground leases, four as not ground leases and one did not state its structure.
Educational content only. InvestmentGrade.com is a commercial real estate brokerage and educational publisher. We do not sell, broker, underwrite, or solicit any bonds, securities, or investment products. Yields, ratings, and prices referenced fluctuate continuously and are sourced from public market data as of the date noted. Nothing on this page constitutes investment advice, an offer to sell, or a solicitation to buy any security. Consult a licensed broker-dealer, registered investment advisor, or tax professional before making any investment decision. For SEC investor education, visit investor.gov.
