LOWE'S COS INC (LOW) Stock Fundamental Analysis
NYSE:LOW - New York Stock Exchange, Inc. - US5486611073 - Common Stock - Currency: USD
Overall LOW gets a fundamental rating of 5 out of 10. We evaluated LOW against 124 industry peers in the Specialty Retail industry. LOW scores excellent on profitability, but there are some minor concerns on its financial health. LOW has a valuation in line with the averages, but on the other hand it scores bad on growth.
1. Profitability
1.1 Basic Checks
LOW had positive earnings in the past year.
In the past year LOW had a positive cash flow from operations.
Each year in the past 5 years LOW has been profitable.
LOW had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
LOW's Return On Assets of 15.05% is amongst the best of the industry. LOW outperforms 90.32% of its industry peers.
Looking at the Return On Invested Capital, with a value of 34.07%, LOW belongs to the top of the industry, outperforming 98.39% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for LOW is significantly above the industry average of 11.79%.
The last Return On Invested Capital (34.07%) for LOW is above the 3 year average (32.39%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.05% | ||
| ROE | N/A | ||
| ROIC | 34.07% |
ROA(3y)16.41%
ROA(5y)16.1%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)32.39%
ROIC(5y)32.79%
1.3 Margins
LOW's Profit Margin of 8.20% is amongst the best of the industry. LOW outperforms 85.48% of its industry peers.
LOW's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 12.38%, LOW belongs to the top of the industry, outperforming 88.71% of the companies in the same industry.
In the last couple of years the Operating Margin of LOW has grown nicely.
LOW has a Gross Margin of 33.37%. This is comparable to the rest of the industry: LOW outperforms 42.74% of its industry peers.
LOW's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.38% | ||
| PM (TTM) | 8.2% | ||
| GM | 33.37% |
OM growth 3Y-0.59%
OM growth 5Y7.17%
PM growth 3Y-1.72%
PM growth 5Y6.99%
GM growth 3Y0.01%
GM growth 5Y0.94%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LOW is creating value.
The number of shares outstanding for LOW has been reduced compared to 1 year ago.
Compared to 5 years ago, LOW has less shares outstanding
Compared to 1 year ago, LOW has an improved debt to assets ratio.
2.2 Solvency
LOW has an Altman-Z score of 3.60. This indicates that LOW is financially healthy and has little risk of bankruptcy at the moment.
LOW has a better Altman-Z score (3.60) than 79.03% of its industry peers.
LOW has a debt to FCF ratio of 5.20. This is a neutral value as LOW would need 5.20 years to pay back of all of its debts.
LOW has a better Debt to FCF ratio (5.20) than 65.32% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.6 |
ROIC/WACC3.74
WACC9.1%
2.3 Liquidity
LOW has a Current Ratio of 1.01. This is a normal value and indicates that LOW is financially healthy and should not expect problems in meeting its short term obligations.
LOW has a Current ratio of 1.01. This is in the lower half of the industry: LOW underperforms 73.39% of its industry peers.
A Quick Ratio of 0.19 indicates that LOW may have some problems paying its short term obligations.
LOW has a Quick ratio of 0.19. This is amonst the worse of the industry: LOW underperforms 87.90% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.19 |
3. Growth
3.1 Past
LOW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -4.90%.
Measured over the past years, LOW shows a quite strong growth in Earnings Per Share. The EPS has been growing by 15.93% on average per year.
Looking at the last year, LOW shows a decrease in Revenue. The Revenue has decreased by -2.52% in the last year.
LOW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.01% yearly.
EPS 1Y (TTM)-4.9%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%-4.58%
Revenue 1Y (TTM)-2.52%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%-2.03%
3.2 Future
The Earnings Per Share is expected to grow by 7.99% on average over the next years.
Based on estimates for the next years, LOW will show a small growth in Revenue. The Revenue will grow by 2.94% on average per year.
EPS Next Y3.42%
EPS Next 2Y6.2%
EPS Next 3Y7.25%
EPS Next 5Y7.99%
Revenue Next Year1.15%
Revenue Next 2Y2.42%
Revenue Next 3Y2.85%
Revenue Next 5Y2.94%
3.3 Evolution
The EPS growth rate is decreasing: in the next years the growth will be less than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 21.65 indicates a rather expensive valuation of LOW.
LOW's Price/Earnings ratio is a bit cheaper when compared to the industry. LOW is cheaper than 72.58% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.85. LOW is around the same levels.
A Price/Forward Earnings ratio of 18.97 indicates a rather expensive valuation of LOW.
Based on the Price/Forward Earnings ratio, LOW is valued a bit cheaper than 60.48% of the companies in the same industry.
LOW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 34.98, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.65 | ||
| Fwd PE | 18.97 |
4.2 Price Multiples
LOW's Enterprise Value to EBITDA is on the same level as the industry average.
LOW's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. LOW is cheaper than 70.97% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.51 | ||
| EV/EBITDA | 13.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
LOW has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)6.33
PEG (5Y)1.36
EPS Next 2Y6.2%
EPS Next 3Y7.25%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 1.90%, LOW has a reasonable but not impressive dividend return.
Compared to an average industry Dividend Yield of 5.92, LOW pays a bit more dividend than its industry peers.
LOW's Dividend Yield is comparable with the S&P500 average which is at 2.36.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
5.2 History
On average, the dividend of LOW grows each year by 16.94%, which is quite nice.
LOW has been paying a dividend for at least 10 years, so it has a reliable track record.
LOW has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)16.94%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
37.76% of the earnings are spent on dividend by LOW. This is a low number and sustainable payout ratio.
The dividend of LOW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP37.76%
EPS Next 2Y6.2%
EPS Next 3Y7.25%
256.36
+5.47 (+2.18%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners78%
Inst Owner Change-0.71%
Ins Owners0.1%
Ins Owner Change4.27%
Market Cap143.67B
Analysts75.5
Price Target268.86 (4.88%)
Short Float %1.44%
Short Ratio2.92
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
Yearly Dividend4.53
Dividend Growth(5Y)16.94%
DP37.76%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.14%
Min EPS beat(2)0.49%
Max EPS beat(2)3.78%
EPS beat(4)4
Avg EPS beat(4)2.01%
Min EPS beat(4)0.49%
Max EPS beat(4)3.78%
EPS beat(8)7
Avg EPS beat(8)2.01%
EPS beat(12)11
Avg EPS beat(12)2.42%
EPS beat(16)15
Avg EPS beat(16)3.72%
Revenue beat(2)1
Avg Revenue beat(2)-0.33%
Min Revenue beat(2)-1.02%
Max Revenue beat(2)0.35%
Revenue beat(4)2
Avg Revenue beat(4)-0.71%
Min Revenue beat(4)-2.31%
Max Revenue beat(4)0.35%
Revenue beat(8)3
Avg Revenue beat(8)-0.87%
Revenue beat(12)5
Avg Revenue beat(12)-0.78%
Revenue beat(16)8
Avg Revenue beat(16)-0.32%
PT rev (1m)0.01%
PT rev (3m)-3.42%
EPS NQ rev (1m)-0.26%
EPS NQ rev (3m)-0.51%
EPS NY rev (1m)0%
EPS NY rev (3m)0.29%
Revenue NQ rev (1m)-0.05%
Revenue NQ rev (3m)-0.09%
Revenue NY rev (1m)0.09%
Revenue NY rev (3m)0.01%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.65 | ||
| Fwd PE | 18.97 | ||
| P/S | 1.73 | ||
| P/FCF | 21.51 | ||
| P/OCF | 16.43 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.95 |
EPS(TTM)11.84
EY4.62%
EPS(NY)13.51
Fwd EY5.27%
FCF(TTM)11.92
FCFY4.65%
OCF(TTM)15.6
OCFY6.08%
SpS148.52
BVpS-23.65
TBVpS-23.65
PEG (NY)6.33
PEG (5Y)1.36
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 15.05% | ||
| ROE | N/A | ||
| ROCE | 44.84% | ||
| ROIC | 34.07% | ||
| ROICexc | 40.03% | ||
| ROICexgc | 40.03% | ||
| OM | 12.38% | ||
| PM (TTM) | 8.2% | ||
| GM | 33.37% | ||
| FCFM | 8.02% |
ROA(3y)16.41%
ROA(5y)16.1%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)32.39%
ROIC(5y)32.79%
ROICexc(3y)34.76%
ROICexc(5y)35.76%
ROICexgc(3y)35.07%
ROICexgc(5y)36.32%
ROCE(3y)42.91%
ROCE(5y)43.33%
ROICexcg growth 3Y-4.01%
ROICexcg growth 5Y13.22%
ROICexc growth 3Y-2.86%
ROICexc growth 5Y13.49%
OM growth 3Y-0.59%
OM growth 5Y7.17%
PM growth 3Y-1.72%
PM growth 5Y6.99%
GM growth 3Y0.01%
GM growth 5Y0.94%
F-Score6
Asset Turnover1.83
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.2 | ||
| Debt/EBITDA | 2.48 | ||
| Cap/Depr | 103.51% | ||
| Cap/Sales | 2.48% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 71.07% | ||
| Profit Quality | 97.83% | ||
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.19 | ||
| Altman-Z | 3.6 |
F-Score6
WACC9.1%
ROIC/WACC3.74
Cap/Depr(3y)97.39%
Cap/Depr(5y)100.6%
Cap/Sales(3y)2.15%
Cap/Sales(5y)2.08%
Profit Quality(3y)98.81%
Profit Quality(5y)110.8%
High Growth Momentum
Growth
EPS 1Y (TTM)-4.9%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%-4.58%
EPS Next Y3.42%
EPS Next 2Y6.2%
EPS Next 3Y7.25%
EPS Next 5Y7.99%
Revenue 1Y (TTM)-2.52%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%-2.03%
Revenue Next Year1.15%
Revenue Next 2Y2.42%
Revenue Next 3Y2.85%
Revenue Next 5Y2.94%
EBIT growth 1Y-4.95%
EBIT growth 3Y-5.12%
EBIT growth 5Y10.39%
EBIT Next Year19.22%
EBIT Next 3Y9.89%
EBIT Next 5Y7.62%
FCF growth 1Y14.13%
FCF growth 3Y-2.32%
FCF growth 5Y22.21%
OCF growth 1Y13.27%
OCF growth 3Y-1.64%
OCF growth 5Y17.44%