LOWE'S COS INC (LOW) Stock Fundamental Analysis
NYSE:LOW - New York Stock Exchange, Inc. - US5486611073 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to LOW. LOW was compared to 121 industry peers in the Specialty Retail industry. While LOW belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. LOW has a valuation in line with the averages, but it does not seem to be growing. LOW also has an excellent dividend rating. These ratings would make LOW suitable for dividend investing!
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.
In the past 5 years LOW has always 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 better Return On Invested Capital (34.07%) than 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 3 year average ROIC (32.39%) for LOW is below the current ROIC(34.07%), indicating increased profibility in the last year.
| 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
LOW has a better Profit Margin (8.20%) than 85.12% of its industry peers.
LOW's Profit Margin has improved in the last couple of years.
The Operating Margin of LOW (12.38%) is better than 88.43% of its industry peers.
LOW's Operating Margin has improved in the last couple of years.
LOW has a Gross Margin (33.37%) which 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
The Return on Invested Capital (ROIC) is well above the Cost of Capital (WACC), so LOW is creating value.
Compared to 1 year ago, LOW has less shares outstanding
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
LOW has an Altman-Z score of 3.48. This indicates that LOW is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.48, LOW is doing good in the industry, outperforming 77.69% of the companies in the same industry.
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 better Debt to FCF ratio (5.20) than 65.29% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | N/A | ||
| Debt/FCF | 5.2 | ||
| Altman-Z | 3.48 |
ROIC/WACC3.75
WACC9.09%
2.3 Liquidity
LOW has a Current Ratio of 1.01. This is a normal value and indicates that LOW is financially healthy and should not expect problems in meeting its short term obligations.
LOW's Current ratio of 1.01 is on the low side compared to the rest of the industry. LOW is outperformed by 72.73% of its industry peers.
A Quick Ratio of 0.19 indicates that LOW may have some problems paying its short term obligations.
LOW's Quick ratio of 0.19 is on the low side compared to the rest of the industry. LOW is outperformed by 87.60% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.01 | ||
| Quick Ratio | 0.19 |
3. Growth
3.1 Past
The earnings per share for LOW have decreased by -4.90% in the last year.
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.
The Revenue has decreased by -2.52% in the past year.
LOW shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 3.01% yearly.
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.
Based on estimates for the next years, LOW will show a small growth in Revenue. The Revenue will grow by 2.94% on average per year.
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.
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
LOW is valuated rather expensively with a Price/Earnings ratio of 19.17.
Based on the Price/Earnings ratio, LOW is valued a bit cheaper than the industry average as 69.42% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 27.28. LOW is valued slightly cheaper when compared to this.
LOW is valuated correctly with a Price/Forward Earnings ratio of 16.80.
Based on the Price/Forward Earnings ratio, LOW is valued a bit cheaper than the industry average as 61.98% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 21.76, LOW is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.17 | ||
| Fwd PE | 16.8 |
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 74.38% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 19.03 | ||
| EV/EBITDA | 12.92 |
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)5.63
PEG (5Y)1.2
EPS Next 2Y6.2%
EPS Next 3Y7.45%
5. Dividend
5.1 Amount
LOW has a Yearly Dividend Yield of 2.17%. Purely for dividend investing, there may be better candidates out there.
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.
Compared to an average S&P500 Dividend Yield of 2.42, LOW has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.17% |
5.2 History
On average, the dividend of LOW grows each year by 16.94%, which is quite nice.
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.
The dividend of LOW is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP37.76%
EPS Next 2Y6.2%
EPS Next 3Y7.45%
226.94
-1.7 (-0.74%)
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 Cap127.09B
Analysts75.61
Price Target268.82 (18.45%)
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 | 19.17 | ||
| Fwd PE | 16.8 | ||
| P/S | 1.53 | ||
| P/FCF | 19.03 | ||
| P/OCF | 14.54 | ||
| P/B | N/A | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.92 |
EPS(TTM)11.84
EY5.22%
EPS(NY)13.51
Fwd EY5.95%
FCF(TTM)11.93
FCFY5.26%
OCF(TTM)15.61
OCFY6.88%
SpS148.64
BVpS-23.67
TBVpS-23.67
PEG (NY)5.63
PEG (5Y)1.2
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 | 3.48 |
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%