Home Depot and Lowe's Face Negative Impact Due to East Coast Longshoremen Strike (HD, LOW)

Home Depot and Lowe’s Face Negative Impact Due to East Coast Longshoremen Strike (HD, LOW)

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A potential strike by longshoremen all along the East Coast, from Massachusetts to Texas, could affect both The Home Depot, Inc. (HD) and Lowe’s Companies, Inc. (LOW) as these retail giants head into their busy season.

The potential strike, which would be the first such strike since 1977, could start on Sunday. This will dramatically affect imports into the US as about 45% of all US commerce flows through East Coast ports.

Most retailers would be affected by such a strike, but home improvement retailers Home Depot and Lowe’s could potentially face the greatest impact. The spring season, specifically the quarter that ends in July, is when the companies see about 28.5% of their annual revenues as homeowners tend to spruce up their homes as the weather improves.

Home Depot has indicated that it as a back-up plan in the event of a strike, while Lowe’s said they will adjust accordingly as the situation unfolds.

Home Depot shares were down 57 cents, or -0.93%, in premarket trading on Friday. Lowe’s shares were also down in premarket trading, falling 23 cents, or -0.65%.

The Bottom Line
Shares of Home Depot (HD) have a 1.90% dividend yield, based on last night’s closing stock price of $61.07. The stock has technical support in the $57-$59 price area. If the shares can firm up, we see overhead resistance around the $64-$65 price levels. Shares of Lowe’s (LOW) have a 1.82% dividend yield, based on last night’s closing stock price of $35.13. The stock has technical support in the $32 price area. The shares are trading at all-time highs.

The Home Depot, Inc. (HD) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars. Lowe’s Companies, Inc. (LOW) is not recommended at this time, holding a Dividend.com DARS™ Rating of 3.4 out of 5 stars.

Be sure to visit our complete recommended list of the Best Dividend Stocks, as well as a detailed explanation of our ratings system here.

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