LOWE'S COS INC (LOW) Stock Fundamental Analysis
USA - New York Stock Exchange - NYSE:LOW - US5486611073 - Common Stock
273.94 USD
-3.97 (-1.43%)
273.5 USD
-0.44 (-0.16%)
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 has an excellent profitability rating, but there are some minor concerns on its financial health. LOW has a correct valuation and a medium growth rate.
1. Profitability
1.1 Basic Checks
- In the past year LOW was profitable.
- LOW had a positive operating cash flow in the past year.
- In the past 5 years LOW has always been profitable.
- In the past 5 years LOW always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 12.65%, LOW belongs to the top of the industry, outperforming 88.52% of the companies in the same industry.
- LOW has a Return On Invested Capital of 22.95%. This is amongst the best in the industry. LOW outperforms 89.34% of its industry peers.
- LOW had an Average Return On Invested Capital over the past 3 years of 32.20%. This is significantly above the industry average of 12.24%.
- 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
- With an excellent Profit Margin value of 8.02%, LOW belongs to the best of the industry, outperforming 84.43% of the companies in the same industry.
- In the last couple of years the Profit Margin of LOW has grown nicely.
- LOW has a Operating Margin of 12.19%. This is amongst the best in the industry. LOW outperforms 86.89% of its industry peers.
- In the last couple of years the Operating Margin of LOW has grown nicely.
- LOW has a Gross Margin (33.59%) which is in line with its industry peers.
- 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
- LOW has a Return on Invested Capital (ROIC), which is well above the Cost of Capital (WACC), which means it is creating value.
- Compared to 1 year ago, LOW has less shares outstanding
- Compared to 5 years ago, LOW has less shares outstanding
- The debt/assets ratio for LOW has been reduced compared to a year ago.
2.2 Solvency
- LOW has an Altman-Z score of 3.38. This indicates that LOW is financially healthy and has little risk of bankruptcy at the moment.
- With a decent Altman-Z score value of 3.38, LOW is doing good in the industry, outperforming 77.87% of the companies in the same industry.
- 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 | 3.38 |
ROIC/WACC2.49
WACC9.23%
2.3 Liquidity
- LOW has a Current Ratio of 1.04. This is a normal value and indicates that LOW is financially healthy and should not expect problems in meeting its short term obligations.
- The Current ratio of LOW (1.04) is worse than 72.95% of its industry peers.
- LOW has a Quick Ratio of 1.04. 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 0.16, LOW is doing worse than 91.80% of the companies in the same industry.
| 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%.
- LOW shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 15.93% yearly.
- Looking at the last year, LOW shows a small growth in Revenue. The Revenue has grown by 0.64% in the last year.
- The Revenue has been growing slightly by 3.01% on average over the past years.
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
- LOW is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.26% yearly.
- The Revenue is expected to grow by 4.00% on average over the next years.
EPS Next Y3.37%
EPS Next 2Y4.49%
EPS Next 3Y5.79%
EPS Next 5Y7.26%
Revenue Next Year3.17%
Revenue Next 2Y5.65%
Revenue Next 3Y4.94%
Revenue Next 5Y4%
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.
- 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
- The Price/Earnings ratio is 22.38, which indicates a rather expensive current valuation of LOW.
- Compared to the rest of the industry, the Price/Earnings ratio of LOW indicates a somewhat cheap valuation: LOW is cheaper than 71.31% of the companies listed in the same industry.
- Compared to an average S&P500 Price/Earnings ratio of 28.87, LOW is valued a bit cheaper.
- Based on the Price/Forward Earnings ratio of 20.94, the valuation of LOW can be described as rather expensive.
- LOW's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. LOW is cheaper than 62.30% of the companies in the same industry.
- The average S&P500 Price/Forward Earnings ratio is at 25.96. LOW is around the same levels.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 22.38 | ||
| Fwd PE | 20.94 |
4.2 Price Multiples
- The rest of the industry has a similar Enterprise Value to EBITDA ratio as LOW.
- Based on the Price/Free Cash Flow ratio, LOW is valued a bit cheaper than the industry average as 69.67% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.8 | ||
| EV/EBITDA | 15.57 |
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)6.65
PEG (5Y)1.4
EPS Next 2Y4.49%
EPS Next 3Y5.79%
5. Dividend
5.1 Amount
- LOW has a Yearly Dividend Yield of 1.75%.
- LOW's Dividend Yield is a higher than the industry average which is at 2.15.
- Compared to an average S&P500 Dividend Yield of 1.82, LOW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.75% |
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
- LOW pays out 38.65% of its income as dividend. This is a sustainable payout ratio.
- The dividend of LOW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP38.65%
EPS Next 2Y4.49%
EPS Next 3Y5.79%
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%.