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 6 out of 10. We evaluated LOW against 121 industry peers in the Specialty Retail industry. LOW scores excellent on profitability, but there are some minor concerns on its financial health. LOW is valued correctly, but it does not seem to be growing. Finally LOW also has an excellent dividend rating. With these ratings, LOW could be worth investigating further for dividend investing!.
1. Profitability
1.1 Basic Checks
LOW had positive earnings in the past year.
LOW had a positive operating cash flow in the past year.
Each year in the past 5 years LOW has been profitable.
Each year in the past 5 years LOW had a positive operating cash flow.
1.2 Ratios
LOW has a better Return On Assets (15.05%) than 90.08% of its industry peers.
LOW has a Return On Invested Capital of 34.07%. This is amongst the best in the industry. LOW outperforms 98.35% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for LOW is significantly above the industry average of 13.07%.
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
Looking at the Profit Margin, with a value of 8.20%, LOW belongs to the top of the industry, outperforming 85.12% of the companies in the same industry.
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 88.43% of the companies in the same industry.
LOW's Operating Margin has improved in the last couple of years.
The Gross Margin of LOW (33.37%) is comparable to the rest of the industry.
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
LOW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
LOW has less shares outstanding than it did 1 year ago.
The number of shares outstanding for LOW has been reduced compared to 5 years ago.
The debt/assets ratio for LOW has been reduced compared to a year ago.
2.2 Solvency
LOW has an Altman-Z score of 3.47. This indicates that LOW is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of LOW (3.47) is better than 77.69% of its industry peers.
The Debt to FCF ratio of LOW is 5.20, which is a neutral value as it means it would take LOW, 5.20 years of fcf income to pay off all of its debts.
LOW has a Debt to FCF ratio of 5.20. This is in the better half of the industry: LOW outperforms 65.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.47 |
ROIC/WACC3.75
WACC9.09%
2.3 Liquidity
A Current Ratio of 1.01 indicates that LOW should not have too much problems paying its short term obligations.
With a Current ratio value of 1.01, LOW is not doing good in the industry: 72.73% of the companies in the same industry are doing better.
LOW has a Quick Ratio of 1.01. This is a bad value and indicates that LOW is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.19, LOW is doing worse than 87.60% of the companies in the same industry.
| 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%.
The Earnings Per Share has been growing by 15.93% on average over the past years. This is quite good.
Looking at the last year, LOW shows a decrease in Revenue. The Revenue has decreased by -2.52% in the last year.
The Revenue has been growing slightly by 3.01% on average over the past years.
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
Based on estimates for the next years, LOW will show a small growth in Earnings Per Share. The EPS will grow by 7.99% on average per year.
The Revenue is expected to grow by 2.94% on average over the next years.
EPS Next Y3.41%
EPS Next 2Y6.2%
EPS Next 3Y7.45%
EPS Next 5Y7.99%
Revenue Next Year1.06%
Revenue Next 2Y2.33%
Revenue Next 3Y2.74%
Revenue Next 5Y2.94%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is decreasing.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.28, which indicates a rather expensive current valuation of LOW.
LOW's Price/Earnings ratio is a bit cheaper when compared to the industry. LOW is cheaper than 70.25% of the companies in the same industry.
When comparing the Price/Earnings ratio of LOW to the average of the S&P500 Index (27.45), we can say LOW is valued slightly cheaper.
A Price/Forward Earnings ratio of 16.90 indicates a correct valuation of LOW.
Based on the Price/Forward Earnings ratio, LOW is valued a bit cheaper than 61.98% of the companies in the same industry.
LOW is valuated rather cheaply when we compare the Price/Forward Earnings ratio to 21.90, which is the current average of the S&P500 Index.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.28 | ||
| Fwd PE | 16.9 |
4.2 Price Multiples
LOW's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, LOW is valued a bit cheaper than the industry average as 74.38% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.14 | ||
| EV/EBITDA | 12.91 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates LOW does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of LOW may justify a higher PE ratio.
PEG (NY)5.66
PEG (5Y)1.21
EPS Next 2Y6.2%
EPS Next 3Y7.45%
5. Dividend
5.1 Amount
With a Yearly Dividend Yield of 2.17%, LOW has a reasonable but not impressive dividend return.
LOW's Dividend Yield is rather good when compared to the industry average which is at 5.27. LOW pays more dividend than 82.64% of the companies in the same industry.
LOW's Dividend Yield is comparable with the S&P500 average which is at 2.42.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
5.2 History
The dividend of LOW is nicely growing with an annual growth rate of 16.94%!
LOW has paid a dividend for at least 10 years, which is 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
LOW pays out 37.76% of its income as dividend. This is a sustainable payout ratio.
LOW's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP37.76%
EPS Next 2Y6.2%
EPS Next 3Y7.45%
228.31
+1.37 (+0.6%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners78.09%
Inst Owner Change1.05%
Ins Owners0.1%
Ins Owner Change4.27%
Market Cap127.85B
Analysts75.61
Price Target268.82 (17.74%)
Short Float %1.58%
Short Ratio3.33
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
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)-3.43%
PT rev (3m)-6.12%
EPS NQ rev (1m)0.13%
EPS NQ rev (3m)-0.38%
EPS NY rev (1m)0.28%
EPS NY rev (3m)-0.46%
Revenue NQ rev (1m)-0.02%
Revenue NQ rev (3m)-0.09%
Revenue NY rev (1m)-0.08%
Revenue NY rev (3m)-0.14%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.28 | ||
| Fwd PE | 16.9 | ||
| P/S | 1.54 | ||
| P/FCF | 19.14 | ||
| P/OCF | 14.63 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.91 |
EPS(TTM)11.84
EY5.19%
EPS(NY)13.51
Fwd EY5.92%
FCF(TTM)11.93
FCFY5.22%
OCF(TTM)15.61
OCFY6.84%
SpS148.64
BVpS-23.67
TBVpS-23.67
PEG (NY)5.66
PEG (5Y)1.21
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 | 3.47 |
F-Score6
WACC9.09%
ROIC/WACC3.75
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 Y3.41%
EPS Next 2Y6.2%
EPS Next 3Y7.45%
EPS Next 5Y7.99%
Revenue 1Y (TTM)-2.52%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%-2.03%
Revenue Next Year1.06%
Revenue Next 2Y2.33%
Revenue Next 3Y2.74%
Revenue Next 5Y2.94%
EBIT growth 1Y-4.95%
EBIT growth 3Y-5.12%
EBIT growth 5Y10.39%
EBIT Next Year19.28%
EBIT Next 3Y9.81%
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%