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Lowe's Raises Dividend by 33% Amid Economic Boom

Lowe’s Companies Inc. (LOW) is with more than 1,900 home improvement and hardware stores located across 50 U.S. states and Canada.

The company generated 34% of its revenue from Home Decor, 32% from Building Products, 32% from Hardlines, and 2% from other sources during the first quarter of 2021. Approximately 94% of its revenue came from the United States, with the remainder coming from Canada over the period.

Booming Economy Drives Strong Performance

Lowe’s Companies reported first quarter revenue that rose 24.1% to $24.42 billion, beating first quarter estimates by $670 million, with non-GAAP earnings of $3.21 per share, beating consensus estimates by 68 cents. Comparable sales rose 25.9% during the quarter, which easily beat consensus estimates of just 20.3% growth.

Analysts have been bullish on the stock over the past few quarters. For instance, Morgan Stanley analyst Simeon Gutman raised his price target and reiterated an Overweight rating in May, saying that the company is tracking above its ‘robust’ market case given the strength in the housing market. RBC Capital analyst Scot Ciccarelli added that margin expansion is likely to play out for years as management aggressively buys back stock.

The company raised its quarterly dividend by 33.3% to $0.80 per share, representing a 1.71% forward yield. The dividend is payable on August 4, 2021 to shareholders on record as of July 21, 2021.

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