Lowe’s is an American home improvement retailer providing customers with quality home improvement products at unbeatable prices for over 75 years. Founded in 1946 by Lucius Smith Lowe, the company began as a small-town hardware store and has since grown to become one of the largest home improvement retailers in the world, serving millions of customers every year.
Lowe’s offers products ranging from traditional hardware products like lumber and paint to cutting-edge appliances and innovative home technology; Lowe’s offers something for everyone. With expert advice from store associates, shoppers can easily find what they need to turn visions into reality. Many of its stores also include installation services so customers can have their purchases installed quickly and conveniently.
Business Model
Lowe’s offers customers a vast selection of construction, maintenance, repair, remodelling and decorating-related development products. Its product range includes building materials, tools and hardware, lighting and electrical supplies, plumbing fixtures and materials, appliances and more. It also offers an extensive selection of outdoor power equipment, such as tractors, mowers, blowers, trimmers, snowblowers, chainsaws, generators, pressure washers and accessories to help you get the job done quickly.
Furthermore, Lowe’s also provides customers with an extensive range of installation services. Customers can opt for installation services for flooring, roofing, painting, countertops, bathroom fixtures and much more. So whether you need help installing a new kitchen or are looking for professional guidance on a larger remodel project– Lowe’s will have you covered!
Even for those who are ready to tackle the project themselves but simply need some additional guidance—Lowe’s install sales provides video tutorials and helpful how-to guides, as well as access to independent contractors, should the job require it. Through Lowe’s Install Sales, home improvement projects can be completed quickly and efficiently with assistance from independent contractors. Installed Sales accounted for approximately 5% of Lowe’s total sales in fiscal 2021.
Lowe’s also provides protection plans and repair services to its customers. This protection plan is designed to offer extra security and peace of mind when making purchases from Lowe. Lowe’s protection plan includes coverage for mechanical failures or breakages related to the product purchased. Coverage lasts up to three years after purchase, so customers can rest assured that their investment is protected. In addition, there are additional benefits such as no-cost repairs if the item fails within a certain period of time or free replacements.
Lowe’s products and services are sold through three main distinct selling channels. “In-store” shoppers can enjoy local product selection and in-store experts dedicated to providing recommendations and solutions. Lowe’s also provides “on-site specialists” to assist retail and Pro customers to find the right solutions for their projects. In addition, customers can also take advantage of their “online” options for convenient e-commerce shopping from wherever they are. Through these three distinct channels, Lowe’s has created an experience that caters to every customer’s needs. Customers can shop how they want – whether in-store, with on-site specialists offering personalized assistance or online with easy e-commerce access – assuring them a positive shopping experience every time they visit Lowe’s.
Growth Prospects
With its substantial presence in North America, Lowe’s is well-positioned to capitalize on the booming home improvement market. The company is currently expanding as it looks to invest heavily in new technology. The company has recently announced initiatives such as voice-activated shopping and augmented reality tools for customers, which will surely help enhance the customer experience. As a result, Lowe’s growth prospects look positive, with many analysts forecasting Lowe’s revenue to continue growing at a rate above 10% in the few years.
Dividend Profile
Lowe’s has an impressive track record of growing its dividend payments, even during recessions and periods of economic uncertainty. Furthermore, Lowe’s has maintained a competitively low payout ratio over time, making it one of the few companies that can sustain such high levels of growth while still offering attractive dividends to shareholders.
A low payout indicates that the management believes Lowe’s still has plenty of room to reinvest and grow its business organically. Most importantly, its consistently low payout ratio means that shareholders can continue to expect sustained increases in dividends year after year. Lowe’s dividend history dates back to 1980s, when it began paying out quarterly dividends of $0.14 per share; since then, it has increased dividends for 48 consecutive years, one of the best records among publicly traded companies on U.S. exchanges. Its current annual dividend rate stands at $4.2 per share, current yield of 2.17%, and its current payout ratio is only 23.5%.
Business Risks
One of the most significant risks facing Lowe’s is competition risk. With big-box stores competing in the same space, like Home Depot, Walmart, and even smaller competitors, such as Menards or Ace Hardware, Lowe’s must work hard to differentiate itself from other offerings on the market.
Lowe’s may also face economic risk due to changes in consumer spending habits or rising costs of commodities needed for their operations. Lowe’s actively monitors the economy to manage these risks for shifts in consumer behaviour and commodity costs that could affect its bottom line.
Closing Thoughts
Lowe’s is one of the most attractive dividend stocks on the market today. The home improvement retail giant has consistently grown its profits over the past decade and has outperformed many of its peers. Lowe’s also boasts a healthy balance sheet and low debt levels, which helps to ensure financial stability even during downturns. Since becoming a publicly traded company in 1961, Lowe’s has paid out dividends, making it an excellent choice for income investors seeking stability and reliable payouts. Moreover, their payout ratio stands at just 23.5%; investors can be sure that the company is reinvesting money back into itself to keep up with growth in the sector and grow its dividend payment in the future.