LOWE'S COS INC (LOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LOW - US5486611073 - Common Stock
246.49 USD
+1.74 (+0.71%)
246.49 USD
0 (0%)
LOW gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 122 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 decent growth rate and is not valued too expensively.
1. Profitability
1.1 Basic Checks
In the past year LOW was profitable.
In the past year LOW had a positive cash flow from operations.
LOW had positive earnings in each of the past 5 years.
Each year in the past 5 years LOW had a positive operating cash flow.
1.2 Ratios
The Return On Assets of LOW (12.65%) is better than 87.70% of its industry peers.
Looking at the Return On Invested Capital, with a value of 22.95%, LOW belongs to the top of the industry, outperforming 89.34% of the companies in the same industry.
Measured over the past 3 years, the Average Return On Invested Capital for LOW is significantly above the industry average of 12.14%.
The last Return On Invested Capital (22.95%) for LOW is well below the 3 year average (32.20%), which needs to be investigated, but indicates that LOW had better years and this may not be a problem.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.65% | ||
| ROE | N/A | ||
| ROIC | 22.95% |
ROA(3y)16.41%
ROA(5y)16.1%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)32.2%
ROIC(5y)32.68%
1.3 Margins
LOW has a better Profit Margin (8.02%) than 84.43% 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 12.19%, LOW belongs to the top of the industry, outperforming 86.89% of the companies in the same industry.
In the last couple of years the Operating Margin of LOW has grown nicely.
The Gross Margin of LOW (33.59%) is comparable to the rest of the industry.
In the last couple of years the Gross Margin of LOW has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 12.19% | ||
| PM (TTM) | 8.02% | ||
| GM | 33.59% |
OM growth 3Y-1.15%
OM growth 5Y6.8%
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.
LOW has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, LOW has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 3.23 indicates that LOW is not in any danger for bankruptcy at the moment.
The Altman-Z score of LOW (3.23) is better than 77.05% of its industry peers.
The Debt to FCF ratio of LOW is 5.66, which is a neutral value as it means it would take LOW, 5.66 years of fcf income to pay off all of its debts.
LOW has a better Debt to FCF ratio (5.66) than 64.75% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.66 | ||
| Altman-Z | 3.23 |
ROIC/WACC2.5
WACC9.18%
2.3 Liquidity
A Current Ratio of 1.04 indicates that LOW should not have too much problems paying its short term obligations.
LOW has a Current ratio of 1.04. This is in the lower half of the industry: LOW underperforms 72.95% of its industry peers.
A Quick Ratio of 0.16 indicates that LOW may have some problems paying its short term obligations.
LOW has a worse Quick ratio (0.16) than 91.80% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.16 |
3. Growth
3.1 Past
LOW shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.55%.
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.
LOW shows a small growth in Revenue. In the last year, the Revenue has grown by 0.64%.
Measured over the past years, LOW shows a small growth in Revenue. The Revenue has been growing by 3.01% on average per year.
EPS 1Y (TTM)3.55%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%5.88%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%3.19%
3.2 Future
The Earnings Per Share is expected to grow by 8.04% on average over the next years. This is quite good.
The Revenue is expected to grow by 4.00% on average over the next years.
EPS Next Y3.37%
EPS Next 2Y4.48%
EPS Next 3Y5.78%
EPS Next 5Y8.04%
Revenue Next Year3.17%
Revenue Next 2Y5.69%
Revenue Next 3Y4.91%
Revenue Next 5Y4%
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 accelerating.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 20.14, the valuation of LOW can be described as rather expensive.
Based on the Price/Earnings ratio, LOW is valued a bit cheaper than the industry average as 74.59% of the companies are valued more expensively.
Compared to an average S&P500 Price/Earnings ratio of 27.17, LOW is valued a bit cheaper.
With a Price/Forward Earnings ratio of 18.85, LOW is valued on the expensive side.
Based on the Price/Forward Earnings ratio, LOW is valued a bit cheaper than 63.11% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 23.79, LOW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.14 | ||
| Fwd PE | 18.85 |
4.2 Price Multiples
LOW's Enterprise Value to EBITDA ratio is in line with the industry average.
Compared to the rest of the industry, the Price/Free Cash Flow ratio of LOW indicates a somewhat cheap valuation: LOW is cheaper than 72.13% of the companies listed in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.61 | ||
| EV/EBITDA | 14.24 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The excellent profitability rating of LOW may justify a higher PE ratio.
PEG (NY)5.97
PEG (5Y)1.26
EPS Next 2Y4.48%
EPS Next 3Y5.78%
5. Dividend
5.1 Amount
LOW has a Yearly Dividend Yield of 1.99%.
Compared to an average industry Dividend Yield of 2.20, LOW pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 1.94, LOW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
5.2 History
The dividend of LOW is nicely growing with an annual growth rate of 16.94%!
LOW has been paying a dividend for at least 10 years, so it has a reliable track record.
LOW has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)16.94%
Div Incr Years34
Div Non Decr Years34
5.3 Sustainability
38.65% of the earnings are spent on dividend by LOW. This is a low number and sustainable payout ratio.
LOW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP38.65%
EPS Next 2Y4.48%
EPS Next 3Y5.78%
246.49
+1.74 (+0.71%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners80.03%
Inst Owner Change0%
Ins Owners0.09%
Ins Owner Change-2.29%
Market Cap138.27B
Revenue(TTM)84.26B
Net Income(TTM)6.76B
Analysts77
Price Target278.09 (12.82%)
Short Float %2.02%
Short Ratio3.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.99% |
Yearly Dividend4.53
Dividend Growth(5Y)16.94%
DP38.65%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.59%
Min EPS beat(2)1.03%
Max EPS beat(2)2.14%
EPS beat(4)4
Avg EPS beat(4)1.86%
Min EPS beat(4)0.49%
Max EPS beat(4)3.78%
EPS beat(8)8
Avg EPS beat(8)2.34%
EPS beat(12)11
Avg EPS beat(12)2.25%
EPS beat(16)15
Avg EPS beat(16)2.7%
Revenue beat(2)0
Avg Revenue beat(2)-1.01%
Min Revenue beat(2)-1.01%
Max Revenue beat(2)-1.01%
Revenue beat(4)1
Avg Revenue beat(4)-0.67%
Min Revenue beat(4)-1.02%
Max Revenue beat(4)0.35%
Revenue beat(8)3
Avg Revenue beat(8)-0.61%
Revenue beat(12)4
Avg Revenue beat(12)-0.72%
Revenue beat(16)6
Avg Revenue beat(16)-0.73%
PT rev (1m)-1.81%
PT rev (3m)-3.35%
EPS NQ rev (1m)-0.05%
EPS NQ rev (3m)-6.15%
EPS NY rev (1m)0%
EPS NY rev (3m)-0.46%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)5.68%
Revenue NY rev (1m)0%
Revenue NY rev (3m)1.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 20.14 | ||
| Fwd PE | 18.85 | ||
| P/S | 1.64 | ||
| P/FCF | 19.61 | ||
| P/OCF | 15.02 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 14.24 |
EPS(TTM)12.24
EY4.97%
EPS(NY)13.08
Fwd EY5.31%
FCF(TTM)12.57
FCFY5.1%
OCF(TTM)16.42
OCFY6.66%
SpS150.2
BVpS-18.51
TBVpS-36.29
PEG (NY)5.97
PEG (5Y)1.26
Graham NumberN/A
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 12.65% | ||
| ROE | N/A | ||
| ROCE | 30.22% | ||
| ROIC | 22.95% | ||
| ROICexc | 23.67% | ||
| ROICexgc | 33.95% | ||
| OM | 12.19% | ||
| PM (TTM) | 8.02% | ||
| GM | 33.59% | ||
| FCFM | 8.37% |
ROA(3y)16.41%
ROA(5y)16.1%
ROE(3y)N/A
ROE(5y)N/A
ROIC(3y)32.2%
ROIC(5y)32.68%
ROICexc(3y)34.56%
ROICexc(5y)35.64%
ROICexgc(3y)34.87%
ROICexgc(5y)36.2%
ROCE(3y)42.67%
ROCE(5y)43.19%
ROICexgc growth 3Y-4.55%
ROICexgc growth 5Y12.84%
ROICexc growth 3Y-3.41%
ROICexc growth 5Y13.11%
OM growth 3Y-1.15%
OM growth 5Y6.8%
PM growth 3Y-1.72%
PM growth 5Y6.99%
GM growth 3Y0.01%
GM growth 5Y0.94%
F-Score6
Asset Turnover1.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.66 | ||
| Debt/EBITDA | 3.04 | ||
| Cap/Depr | 104.35% | ||
| Cap/Sales | 2.56% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 74.61% | ||
| Profit Quality | 104.28% | ||
| Current Ratio | 1.04 | ||
| Quick Ratio | 0.16 | ||
| Altman-Z | 3.23 |
F-Score6
WACC9.18%
ROIC/WACC2.5
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)3.55%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%5.88%
EPS Next Y3.37%
EPS Next 2Y4.48%
EPS Next 3Y5.78%
EPS Next 5Y8.04%
Revenue 1Y (TTM)0.64%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%3.19%
Revenue Next Year3.17%
Revenue Next 2Y5.69%
Revenue Next 3Y4.91%
Revenue Next 5Y4%
EBIT growth 1Y0.28%
EBIT growth 3Y-5.66%
EBIT growth 5Y10.02%
EBIT Next Year20.09%
EBIT Next 3Y10.55%
EBIT Next 5Y8.17%
FCF growth 1Y30.56%
FCF growth 3Y-2.32%
FCF growth 5Y22.21%
OCF growth 1Y23.05%
OCF growth 3Y-1.64%
OCF growth 5Y17.44%
LOWE'S COS INC / LOW FAQ
What is the fundamental rating for LOW stock?
ChartMill assigns a fundamental rating of 6 / 10 to LOW.
What is the valuation status of LOWE'S COS INC (LOW) stock?
ChartMill assigns a valuation rating of 4 / 10 to LOWE'S COS INC (LOW). This can be considered as Fairly Valued.
Can you provide the profitability details for LOWE'S COS INC?
LOWE'S COS INC (LOW) has a profitability rating of 8 / 10.
Can you provide the expected EPS growth for LOW stock?
The Earnings per Share (EPS) of LOWE'S COS INC (LOW) is expected to grow by 3.37% in the next year.
How sustainable is the dividend of LOWE'S COS INC (LOW) stock?
The dividend rating of LOWE'S COS INC (LOW) is 6 / 10 and the dividend payout ratio is 38.65%.