Lowe’s Companies (LOW) Stock Analysis
Lowe’s (LOW) has paid a dividend since 1961 and increased its dividend for 54 consecutive years; qualifying the company as a Dividend King, Dividend Aristocrat, and Dividend Champion.
Dividend Yield: 1.9%
Current Dividend: $1.64
Cash Flow From Operations (CFO) Per Share (ttm): $6.73
Free Cash Flow Per Share (ttm): $5.40
Market Capitalization: 72 B
Enterprise Value: 85 B
Dividend Analyzer Checklist
(updated December 2017)
Dividend Safety Score (20/33 points)
Dividend Payout Ratio (ttm): 35%
Cash Dividend Payout Ratio (ttm): 27% (12/12 points)
Net Financial Debt: $15210 M
Total Assets: $36783 M
Net Financial Debt / Total Assets: 41% (3/12 points)
Net Financial Debt to EBITDA (ttm): 218%
Piotroski Score (1-9) (TTM): (5/9 points)
Profitability Score (29/33 points)
Operating Earnings Yield (ttm): 9.5% (12/15 points)
Net Income (ttm): $3556 M
Gross Profit (ttm): $23615 M
Total Assets: $36783 M
Gross Profitability Ratio = GP / Total Assets: 64% (17/18 points)
Cash Return On Invested Capital (CROIC)(tttm): 21%
Return on Invested Capital (ROIC): 16%
Valuation Score (22/34 points)
Free Cash Flow Yield (ttm): 6.5% (13/17 points)
EV to EBIT (ttm): 13.4
EV to EBITDA (ttm): 10.8 (9/17 points)
Price to Sales Ratio (ttm): 1.0
Price to Book Value (ttm): 12.1
Price to Earnings Ratio (P/E) (ttm): 20
PE 10: 40
TOTAL POINTS – (71/100) (50 is an average score)
Earnings Report: 11/21/17
Next Earnings Report: 3/01/18
Stay Updated All the Time!
Dividend Safety, Profitability, and Valuation Scores for 300+ Dividend Stocks Each Month.
Fundamental Quantitative Analysis to Find the "Hidden Gems".
Six Dividend Portfolios (Stocks & ETFs).
Rankings & Recommendations
(updated December 2017)
Lowe’s (LOW) is ranked #34 (out of 377) overall and #20 (out of 61) in the Consumer Cyclical Sector by the Dividend Analyzer.
Type of Investor / Recommendation
Large Diversified Dividend Portfolios / Should Be Considered
Looking For Exposure to Consumer Cyclical Sector / Can Be Considered
Deep Value Investors / Watchlist
Sector: Consumer Cyclical
Industry: Home Improvement Stores
Lowe’s (LOW) operates over 1850 home improvement and hardware stores in the United States, Canada, and Mexico. With over 65 billion in annual revenues, Lowe’s is the second largest home improvement retailer in the world (behind Home Depot).
Lowe’s customers are homeowners, renters, and professionals. Selling channels include in-store, online, on-site, and contact centers (phone).
Lowe’s specializes in products and services for “retail do-it-yourself and do it for me” customers and commercial business clients looking for home decorating, maintenance, repair, and remodeling. A typical Lowe’s store carries 36,000 items with hundreds of thousands available through special orders. Subsidiaries include Orchard Supply Hardware, Reno-Depot, Rona Inc.
Lowe’s product categories include: Lumber & Building Materials, Tools & Hardware, Appliances, Fashion Fixtures, Rough Plumbing & Electrical, Lawn & Garden, Seasonal Living, Paint, Flooring, Millwork, Kitchens, Outdoor Power Equipment, and Home Fashions.
Lowe’s has established itself as a low cost provider and efficient operator. Its size gives it great bargaining power, and its distribution network provides operational efficiency.
LOW is an extremely shareholder friendly company. In addition to 53 consecutive years of dividend increases, the company has invested nearly 19 billion dollars in the last 5 years to purchasing its own stock.
LOW depends on a very cyclical industry that is challenging when the economy is slow. Undoubtedly, the home improvement industry has been stimulated by artificially low interest rates. It’s unclear how much high rates might hurt future sales and growth.
International expansion and providing service to under served communities including domestic markets and international locations. In 2016 Lowe’s acquired Rona, a Canadian home improvement retailer, that provides the company a strategic footprint in a large and growing market.
A greater emphasis on professional sales could boost opportunities with the growth in the number of baby boomers at the age they desire these kinds of services.
Slow growth, small margins, and above average debt make economic downturns painful. Higher interest rates can have a magnifying effect on this cyclical industry.
Portfolio Position Disclosures:
DVB Foundation Portfolio: None
DVB Dividend Growth Portfolio: None
DVB High Income Portfolio: None
AAAMP Global Value: None
Dividend Investing Without Emotional Bias
Get All 3 Dividend Value Builder Services for 1 Low Price: $99/year (save 33% over purchasing separately).
Dividend Analyzer, Treasure Trove Twelve, & Dividend Portfolios Newsletters
Free 7-Day Trial. You take NO risk. Start today!