Lowe’s Companies, Inc. (LOW) increases dividend by 17%

Lowe’s Companies’ (NYSE:LOW) dividend was increased by 17%.  Its overall yield is 2.02%. The firm started paying a dividend in 1980.

Lowe’s Companies is one of the largest home improvement stores in the United States along with operations in Canada and Mexico. The firm offers home improvement products along with items for repair, remodeling, and maintenance of a home. Its products include a wide range including appliances, hardware, lumber, lighting, pluming, electrical, outdoor living, and power equipment.  The company operates over 2,358 home improvement and hardware stores. The company was founded in 1946 and is located in Mooresville, North Carolina.

Lowe’s has maintained a three-year growth rate of dividends of 20.5 percent. Lowe’s currently ranks 2nd in dividend yield within the large cap services, home improvement stores category. The quarterly dividend for the June payment will be $0.41 versus the prior year rate of $0.35 per share. Lowe’s is not a member of our Top 100 Dividend Stocks.  (see below).

The dividend will be paid at the new higher rate on August 9, 2017, to shareholders of record at close of business on July 26, 2017. Lowe’s is currently priced at $81.08. Listed in the table below are the quarterly dividend payments since 2010.

Date Quarterly Dividend
7/26/2017 0.41
4/24/2017 0.35
1/23/2017 0.35
10/17/2016 0.35
7/18/2016 0.35
4/18/2016 0.28
1/15/2016 0.28
10/19/2015 0.28
7/20/2015 0.28
4/20/2015 0.23
1/16/2015 0.23
10/20/2014 0.23
7/21/2014 0.23
4/21/2014 0.18
1/17/2014 0.18
10/21/2013 0.18
7/22/2013 0.18
4/22/2013 0.16
1/18/2013 0.16
10/22/2012 0.16
7/23/2012 0.16
4/23/2012 0.14
1/23/2012 0.14
10/17/2011 0.14
7/18/2011 0.14
4/18/2011 0.11
1/14/2011 0.11
10/18/2010 0.11
7/19/2010 0.11
4/19/2010 0.09
1/15/2010 0.09

Analysis of Lowe’s Companies is based upon our five key criteria for the Top 100 list, which include;

Category Value Score
Dividend Yield 2.02% 341
Dividend Growth (3-7 year avg) 20.4 120
Forward P/E 15.29 169
S&P Financial Rating A- 155
Beta 1.05 312
Total Score 1,097

 

% Yield 3 Year Div. Growth Rate 7 Year Div. Growth Rate SPS 2017 P/S Ratio 10 yr P/S Low 10 yr P/S High
2.02%  20.5  20.3  82.75  0.95  0.60  1.30

Positives;

  • Lowe’s has paid out a dividend consecutively for the past 37 years.
  • Lowe’s maintains an investment grade rating of A-.
  • Lowe’s current dividend yield (2.02%) is above its five-year average historical dividend yield.

Negatives;

  • Lowe’s maintains a beta of 1.05, higher than the average company.

Data; 

2016 2015 2014 2013 2012
Earnings per Share 3.99 3.29 2.67 2.16 1.76
Annual Dividend 1.33 1.07 0.87 0.7 0.62
Payout Ratio 33.33% 32.52% 32.58% 32.41% 35.23%
Earnings per Share 2017 (projected) 4.64
Dividend 1.52
Payout Ratio 32.76%

Based on the firm’s higher than average beta, moderate yield, and historical price/sales ratio, Lowe’s Companies Inc. sits just outside our Top 100 Dividend Stocks

LOW Dividend Yield Range, High/Low

 Current: 2.02%

Lowest 1.15% Mar 24 2015
Highest 2.33% Aug 02 2012
Lowe’s Companies, Inc. Dividend Yield Chart (Click to enlarge)

Chart Explanation:  Dividend growth stocks may be viewed undervalued when the current yield is above historical readings for the past 5 years.

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