"At Lowe's, same store sales were up 1.9% which is not bad. But Home Depot posted a 7% same store sales gain, when the Street was only looking for 4%. Not only is that a great number, it's their best since 2004," Cramer said.
As a result, the gap between Lowe's and Home Depot on this vital key metric is the widest it's been in more than 13 years, at 520 basis points.
"When Home Depot is racking up 7% comps, while Lowe's can't even break 2%, you know that these companies are not in the same boat," Cramer said.
And the divergence doesn't stop there.
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"Home Depot's sales per square foot came in at $318, up 13.3% from the bottom. At Lowe's, the sales per square foot are much lower, at $256.52, up only 3.2% from the bottom."
"Plus, even though Home Depot's gross margin—what they make after the cost of sales— shrank by 6 basis points, at 34.9% it was still a good 60 basis points higher than Lowe's," Cramer added.
So, how is it that Home Depot was able to do so much better than Lowe's?
"One word," said Cramer, execution. "Under the leadership of CEO Frank Blake, Home Depot is simply a much better run company than Lowe's."
In addition, Cramer sees other catalysts that favor Home Depot such as better locations, a more aggressive buy back program and he likes the dividend. "Home Depot just introduced a 34% dividend boost, the fourth dividend hike in four years, bringing the yield up to 2.25%, that much better than the 1.6% yield you get from Lowe's."
All told, Cramer said the better stock is Home Depot - handS down.
"To me, these two earnings reports are the clearest evidence yet for why you need to stick with the best of breed Home Depot and avoid Lowe's," he said. "I prefer the stock of Home Depot any day of the week."
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