Up to date on March tenth, 2026 by Felix Martinez
Lowe’s Firms (LOW) has a extremely spectacular long-term dividend development monitor document. The corporate has elevated its dividend for over 62 consecutive years. This makes Lowe’s a uncommon dividend inventory, even among the many Dividend Aristocrats, as the corporate qualifies for Dividend King standing because of greater than 5 many years of annual dividend will increase.
Yearly, we evaluation every of the Dividend Aristocrats, a bunch of 69 firms within the S&P 500 Index with 25+ consecutive years of dividend will increase.
We’ve got constructed a full record of all 69 Dividend Aristocrats. You possibly can obtain a free copy of our Dividend Aristocrats record, together with essential metrics like dividend yields and payout ratios, by clicking on the hyperlink beneath:
Disclaimer: Positive Dividend is just not affiliated with S&P International in any means. S&P International owns and maintains The Dividend Aristocrats Index. The knowledge on this article and downloadable spreadsheet is predicated on Positive Dividend’s personal evaluation, abstract, and evaluation of the S&P 500 Dividend Aristocrats ETF (NOBL) and different sources, and is supposed to assist particular person buyers higher perceive this ETF and the index upon which it’s primarily based. Not one of the info on this article or spreadsheet is official knowledge from S&P International. Seek the advice of S&P International for official info.
Along with being a Dividend Aristocrat, Lowe’s is on the unique record of Dividend Kings, which have raised their dividends for a tremendous 50+ years in a row. You possibly can see your entire record of Dividend Kings right here.
Lowe’s can be a high-growth dividend inventory. This text will talk about Lowe’s enterprise mannequin, development potential, and valuation.
Enterprise Overview
Lowe’s was based in 1946. Within the practically 80 years since, it has grown into the second-largest dwelling enchancment retailer, behind solely The House Depot (HD).
The corporate operates greater than 1,700 shops within the U.S., Canada, and Mexico. Lowe’s presents a variety of merchandise for dwelling upkeep, restore, reworking, and adorning. It has a wide array of main nationwide manufacturers, in addition to a lot of personal manufacturers.
Lowe’s reported fourth-quarter fiscal 2025 income of $20.6 billion, representing a ten.9% year-over-year improve, whereas adjusted diluted EPS reached $1.98, beating expectations and rising 2.6% from the prior 12 months’s adjusted $1.93. Reported diluted EPS was $1.78, in contrast with $1.99 in This fall 2024, primarily as a result of $149 million in pre-tax bills associated to the acquisitions of Basis Constructing Supplies and Artisan Design Group.
Web earnings for the quarter totaled $999 million, whereas comparable gross sales elevated 1.3%, supported by continued development in Professional prospects, on-line channels, and residential companies, in addition to sturdy vacation demand.
Profitability metrics confirmed some stress regardless of increased gross sales. Gross margin declined barely to 32.46% from 32.86%, whereas working earnings decreased to $1.71 billion, representing an 8.3% working margin, down from 9.9% within the prior-year quarter.
Larger promoting, basic, and administrative bills—partly tied to acquisitions and development initiatives—contributed to the margin compression. Through the quarter, the corporate returned $673 million to shareholders by dividends, reflecting its continued give attention to capital returns.
For full-year fiscal 2025, Lowe’s generated $86.3 billion in income, up from $83.7 billion within the prior 12 months, whereas web earnings totaled $6.65 billion, barely beneath $6.96 billion in fiscal 2024. The corporate reported diluted EPS of $11.85, in contrast with $12.23 the earlier 12 months, whereas returning $2.6 billion to shareholders through dividends.
Waiting for fiscal 2026, administration expects income of $92–$94 billion, comparable gross sales between flat and up 2%, working margins of 11.2%–11.4%, and adjusted EPS of $12.25–$12.75, supported by ongoing productiveness initiatives and development throughout Professional, on-line, and residential companies channels.
Supply: Investor presentation
Development Prospects
We consider that Lowe’s will ship 8% annual earnings-per-share development over the following 5 years. Lowe’s has a protracted runway forward.
Lately, Lowe’s has made a concerted effort to enhance its prospects’ in-store expertise by merchandising and stock practices, in addition to investing in capabilities to satisfy orders exterior its shops.
This consists of particular options for Professional prospects that drive recurring income and make it simpler for DIY prospects to order their merchandise on-line, and choose them up or have them delivered. This can be a strategic shift from the previous mannequin Lowe’s operated underneath, and it has labored properly lately.
Lowe’s usually opens a small variety of new shops annually, which isn’t a significant driver of development. Nevertheless, it continues to capitalize on rising housing and building spending, and we see these as development drivers transferring ahead, given nonetheless comparatively low mortgage charges, whether or not or not the shop rely rises.
The U.S. economic system continues to develop regardless of headwinds comparable to excessive inflation. Constructive GDP development is arguably a very powerful financial indicator for Lowe’s, as the corporate is very reliant on shopper spending. The continued U.S. financial development is a optimistic catalyst for Lowe’s.
Lowe’s has steadily been repurchasing shares on the open market lately. These buybacks shrink the corporate’s share rely, translating right into a rising share of total income for every remaining share.
Buybacks have been a significant driver within the compelling earnings-per-share development that Lowe’s has loved, and we consider the identical will maintain true sooner or later.
The mixture of continued e-commerce enlargement, long-term financial development, and working efficiency ought to drive Lowe’s income. With the influence of buybacks added, we consider annual earnings-per-share development of 8% could be very a lot achievable.
Aggressive Benefits & Recession Efficiency
The retail trade usually presents few aggressive benefits. This can be a extremely difficult retail surroundings, because the rise of Amazon and different Web retailers threatens to undercut brick-and-mortar shops. Customers have shifted spending {dollars} towards e-commerce for the comfort and low costs.
Nevertheless, Lowe’s is a specialty retailer, which provides it a aggressive benefit. House enchancment tasks are sometimes complicated. Customers are prepared to journey to shops, examine merchandise in individual, and ask workers questions, which has helped defend dwelling enchancment retailers from Amazon (AMZN).
That mentioned, Lowe’s is just not proof against recessions. The patron is susceptible to declining throughout financial downturns. Lowe’s is dependent upon a financially wholesome shopper with stable housing and building markets. The Nice Recession was a very steep downturn that considerably affected Lowe’s backside line.
Lowe’s earnings-per-share throughout the Nice Recession are beneath:
- 2007 earnings-per-share of $1.86
- 2008 earnings-per-share of $1.49 (20% decline)
- 2009 earnings-per-share of $1.21 (19% decline)
- 2010 earnings-per-share of $1.44 (19% improve)
Lowe’s earnings fell sharply throughout the recession, however the firm remained worthwhile. This helped it proceed rising its dividend annually. And it bounced again fairly rapidly, as by 2013, Lowe’s earnings-per-share had surpassed 2007 ranges.
Valuation & Anticipated Returns
Lowe’s is anticipated to generate adjusted EPS of $12.50 for 2026. In consequence, the inventory trades at a price-to-earnings ratio of 20.1. That is above our honest worth estimate of 20, so we see the inventory as barely overvalued. A contracting price-to-earnings ratio may cut back future returns by roughly 0.1% per 12 months for the following 5 years.
Along with valuation modifications, Lowe’s returns will encompass earnings development and dividends.
We see annual earnings-per-share development of seven%, plus the present 1.9% yield, offset considerably by a declining valuation a number of. That may produce total annual returns of roughly 8.8%, an interesting potential price of return.
The dividend payout ratio stays close to 38% of earnings, so there may be actually loads of room for added dividend development within the coming years.
Closing Ideas
Lowe’s has elevated its dividend for 62 consecutive years. Though the present retail surroundings is difficult, Lowe’s operates in a distinct segment that ought to stand up to aggressive threats from on-line retailers.
Lowe’s continues to be rising gross sales and earnings, which ought to enable for continued dividend development. It additionally has a conservative dividend payout ratio, which helps excessive dividend will increase. With an anticipated price of return underneath 8.8% per 12 months, Lowe’s inventory receives a maintain score at present costs.
Moreover, the next Positive Dividend databases include probably the most dependable dividend growers in our funding universe:
In the event you’re searching for shares with distinctive dividend traits, contemplate the next Positive Dividend databases:
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