Lowe’s Bumps up Quarterly Dividend By 33%; Street Says Buy


Lowe’s Cos. (LOW) raised its quarterly dividend by 33% to $0.80 per share. Lowe’s is a retail company that specializes in home improvement.

The dividend is payable on August 4 to shareholders of record on July 21. Lowe’s annual dividend of $3.20 per share now reflects a dividend yield of 1.7%.

On May 19, Lowe’s reported stronger-than-expected Q1 results. The company reported earnings of $3.21 per share, which outpaced the Street’s estimates of $2.62 and rose 81% year over year. Total revenues of $24.4 billion were above the consensus estimate of $23.9 billion and increased 24.1% year over year. (See Lowe’s stock analysis on TipRanks)

Following the Q1 earnings announcement, Guggenheim analyst Steven Forbes reiterated a Buy rating on Lowe’s.

Forbes said, “LOW’s 1Q 2021 operating results exceeded our expectations, broadly. Importantly, not only was gross margin expansionary (up ~20 basis points year-over-year) in the face of significant lumber inflation—with prices up ~45% quarter-over-quarter—but the company generated a relatively high incremental margin on the top-line beat (based on our estimates), showcasing an elevated level of expense control—resulting in a ~13.30% EBIT margin (up ~310 basis points year-over-year).”

Consensus among analysts is a Strong Buy based on 17 Buys versus 4 Holds. The average analyst price target stands at $230.71 and implies upside potential of 19.1% to current levels. Shares have gained 51.2% over the past year.

Lowe’s scores a 9 of 10 from TipRanks’ Smart Score rating system, indicating that the stock has strong potential to outperform market expectations.

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