LOWE'S COS INC (LOW) Stock Fundamental Analysis
NYSE:LOW - New York Stock Exchange, Inc. - US5486611073 - Common Stock - Currency: USD
Taking everything into account, LOW scores 5 out of 10 in our fundamental rating. LOW was compared to 121 industry peers in the Specialty Retail industry. While LOW has a great profitability rating, there are some minor concerns on its financial health. LOW is valued correctly, but it does not seem to be growing.
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.
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
LOW has a better Return On Assets (16.10%) than 93.39% of its industry peers.
Looking at the Return On Invested Capital, with a value of 32.66%, LOW belongs to the top of the industry, outperforming 95.87% of the companies in the same industry.
LOW had an Average Return On Invested Capital over the past 3 years of 32.39%. This is significantly above the industry average of 14.45%.
The 3 year average ROIC (32.39%) for LOW is below the current ROIC(32.66%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.1% | ||
| ROE | N/A | ||
| ROIC | 32.66% |
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 has a better Profit Margin (8.30%) than 85.95% of its industry peers.
LOW's Profit Margin has improved in the last couple of years.
LOW's Operating Margin of 12.51% is amongst the best of the industry. LOW outperforms 87.60% of its industry peers.
In the last couple of years the Operating Margin of LOW has grown nicely.
LOW has a Gross Margin of 33.32%. This is comparable to the rest of the industry: LOW outperforms 40.50% of 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 | 12.51% | ||
| PM (TTM) | 8.3% | ||
| GM | 33.32% |
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.
Compared to 1 year ago, LOW has less shares outstanding
The number of shares outstanding for LOW has been reduced compared to 5 years ago.
LOW has a better debt/assets ratio than last year.
2.2 Solvency
An Altman-Z score of 3.59 indicates that LOW is not in any danger for bankruptcy at the moment.
LOW's Altman-Z score of 3.59 is amongst the best of the industry. LOW outperforms 82.64% of its industry peers.
The Debt to FCF ratio of LOW is 4.61, which is a neutral value as it means it would take LOW, 4.61 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 4.61, LOW is doing good in the industry, outperforming 63.64% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.61 | ||
| Altman-Z | 3.59 |
ROIC/WACC3.75
WACC8.7%
2.3 Liquidity
LOW has a Current Ratio of 1.09. This is a normal value and indicates that LOW is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.09, LOW is doing worse than 70.25% of the companies in the same industry.
LOW has a Quick Ratio of 1.09. This is a bad value and indicates that LOW is not financially healthy enough and could expect problems in meeting its short term obligations.
LOW has a Quick ratio of 0.16. This is amonst the worse of the industry: LOW underperforms 90.91% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.16 |
3. Growth
3.1 Past
LOW shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -8.27%.
The Earnings Per Share has been growing by 15.93% on average over the past years. This is quite good.
LOW shows a decrease in Revenue. In the last year, the revenue decreased by -3.13%.
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)-8.27%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%9.04%
Revenue 1Y (TTM)-3.13%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%-0.26%
3.2 Future
Based on estimates for the next years, LOW will show a quite strong growth in Earnings Per Share. The EPS will grow by 9.60% on average per year.
The Revenue is expected to grow by 3.32% on average over the next years.
EPS Next Y3.89%
EPS Next 2Y6.87%
EPS Next 3Y8.23%
EPS Next 5Y9.6%
Revenue Next Year1.19%
Revenue Next 2Y2.39%
Revenue Next 3Y2.74%
Revenue Next 5Y3.32%
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
Based on the Price/Earnings ratio of 18.28, the valuation of LOW can be described as rather expensive.
66.94% of the companies in the same industry are more expensive than LOW, based on the Price/Earnings ratio.
The average S&P500 Price/Earnings ratio is at 28.29. LOW is valued slightly cheaper when compared to this.
LOW is valuated rather expensively with a Price/Forward Earnings ratio of 17.60.
Compared to the rest of the industry, the Price/Forward Earnings ratio of LOW is on the same level as its industry peers.
When comparing the Price/Forward Earnings ratio of LOW to the average of the S&P500 Index (21.08), we can say LOW is valued inline with the index average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.28 | ||
| Fwd PE | 17.6 |
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 69.42% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 15.92 | ||
| EV/EBITDA | 12.51 |
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)4.7
PEG (5Y)1.15
EPS Next 2Y6.87%
EPS Next 3Y8.23%
5. Dividend
5.1 Amount
LOW has a Yearly Dividend Yield of 2.10%. Purely for dividend investing, there may be better candidates out there.
LOW's Dividend Yield is a higher than the industry average which is at 5.57.
LOW's Dividend Yield is comparable with the S&P500 average which is at 2.52.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
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 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
36.97% 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.
DP36.97%
EPS Next 2Y6.87%
EPS Next 3Y8.23%
219
+4.59 (+2.14%)
Chartmill FA Rating
GICS SectorConsumer Discretionary
GICS IndustryGroupConsumer Discretionary Distribution & Retail
GICS IndustrySpecialty Retail
Earnings (Last)
Earnings (Next)
Inst Owners76.76%
Inst Owner Change0.02%
Ins Owners0.09%
Ins Owner Change4.63%
Market Cap122.58B
Analysts75.24
Price Target285.49 (30.36%)
Short Float %1.31%
Short Ratio2.96
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.1% |
Yearly Dividend4.53
Dividend Growth(5Y)16.94%
DP36.97%
Div Incr Years34
Div Non Decr Years34
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)2.61%
Min EPS beat(2)1.44%
Max EPS beat(2)3.78%
EPS beat(4)4
Avg EPS beat(4)2.64%
Min EPS beat(4)1.44%
Max EPS beat(4)3.78%
EPS beat(8)7
Avg EPS beat(8)2.64%
EPS beat(12)11
Avg EPS beat(12)3.03%
EPS beat(16)15
Avg EPS beat(16)5.03%
Revenue beat(2)2
Avg Revenue beat(2)0.24%
Min Revenue beat(2)0.12%
Max Revenue beat(2)0.35%
Revenue beat(4)3
Avg Revenue beat(4)-0.42%
Min Revenue beat(4)-2.31%
Max Revenue beat(4)0.35%
Revenue beat(8)4
Avg Revenue beat(8)-0.44%
Revenue beat(12)5
Avg Revenue beat(12)-0.81%
Revenue beat(16)9
Avg Revenue beat(16)-0.18%
PT rev (1m)-0.07%
PT rev (3m)-1.52%
EPS NQ rev (1m)-0.07%
EPS NQ rev (3m)-7.66%
EPS NY rev (1m)-1.3%
EPS NY rev (3m)-1.66%
Revenue NQ rev (1m)-0.01%
Revenue NQ rev (3m)-1.27%
Revenue NY rev (1m)-0.01%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.28 | ||
| Fwd PE | 17.6 | ||
| P/S | 1.46 | ||
| P/FCF | 15.92 | ||
| P/OCF | 12.74 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.51 |
EPS(TTM)11.98
EY5.47%
EPS(NY)12.45
Fwd EY5.68%
FCF(TTM)13.75
FCFY6.28%
OCF(TTM)17.2
OCFY7.85%
SpS149.49
BVpS-25.43
TBVpS-25.43
PEG (NY)4.7
PEG (5Y)1.15
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 16.1% | ||
| ROE | N/A | ||
| ROCE | 42.99% | ||
| ROIC | 32.66% | ||
| ROICexc | 35.8% | ||
| ROICexgc | 35.8% | ||
| OM | 12.51% | ||
| PM (TTM) | 8.3% | ||
| GM | 33.32% | ||
| FCFM | 9.2% |
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-Score5
Asset Turnover1.94
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 4.61 | ||
| Debt/EBITDA | 2.65 | ||
| Cap/Depr | 97.72% | ||
| Cap/Sales | 2.3% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 77.38% | ||
| Profit Quality | 110.91% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.16 | ||
| Altman-Z | 3.59 |
F-Score5
WACC8.7%
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)-8.27%
EPS 3Y0.03%
EPS 5Y15.93%
EPS Q2Q%9.04%
EPS Next Y3.89%
EPS Next 2Y6.87%
EPS Next 3Y8.23%
EPS Next 5Y9.6%
Revenue 1Y (TTM)-3.13%
Revenue growth 3Y-4.56%
Revenue growth 5Y3.01%
Sales Q2Q%-0.26%
Revenue Next Year1.19%
Revenue Next 2Y2.39%
Revenue Next 3Y2.74%
Revenue Next 5Y3.32%
EBIT growth 1Y-8.82%
EBIT growth 3Y-5.12%
EBIT growth 5Y10.39%
EBIT Next Year19.32%
EBIT Next 3Y9.81%
EBIT Next 5Y7.55%
FCF growth 1Y24.64%
FCF growth 3Y-2.32%
FCF growth 5Y22.21%
OCF growth 1Y18.24%
OCF growth 3Y-1.64%
OCF growth 5Y17.44%