Lowe's dividend growth touches new LOW
Home improvement co announces 4.5% hike for 2024
Lowe's Companies, Inc. (NYSE: LOW), a renowned Dividend Aristocrat, has declared a quarterly cash dividend increase of 4.5%, raising the dividend from $1.10 to $1.15 per share. In our previous substack post we already mentioned the upcoming dividend hike by Lowe’s.
The new dividend will be payable on August 7, 2024, to shareholders of record as of July 24, 2024. This latest increase marks a continuation of Lowe’s impressive dividend growth history, having raised its dividend for 63 consecutive years if this new hike just announced is included.
"While I am pleased with our continued progress toward becoming a world-class omnichannel retailer, as we transform the customer and associate experience, I am even more optimistic about the opportunities in front of us," said Marvin R. Ellison, Lowe's chairman, president and CEO. "Today's dividend increase reflects the Board's confidence in our growth strategy and commitment to disciplined capital allocation that delivers long-term shareholder value."
Lowe’s now pays an estimated $2.6 billion in dividend to shareholders annually. The 5 year CAGR for the dividends is 15.9% but dividend growth has been slowing for two years now (also see ‘dividend history’ below).
Lowe’s Business Overview
Lowe's Companies, Inc., founded in 1946 and based in Mooresville, North Carolina, is a leading home improvement retailer. The company serves homeowners, renters, and professional customers, offering a wide range of products for maintenance, repair, remodeling, and decorating. As of now, Lowe's operates or services more than 2,200 home improvement and hardware stores in the United States and Canada.
Dividend History & Home Depot comparison
Lowe’s has a long-standing tradition of returning value to its shareholders through consistent dividend payments. Since going public in 1961, Lowe's has paid a cash dividend every quarter, showcasing its financial stability and commitment to shareholders. The company’s latest dividend increase, although the smallest in decades, follows a similar modest hike of 4.8% in 2023. Lowe’s impressed with 30%+ hikes in both 2021 and 2022, but growth has been much less since.
LOWE’S ANNUAL DIVIDEND HIKES
2024: +4.5%
2023: +4.8%
2022: +31.3%
2021: +33.3%
2020: +9.1%
2019: +14.6%
2018: +17.1%
2017: +17.1%
2016: +25.0%
2015: +21.7%
Lowe’s peer Home Depot (HD) also announced several 30%+ hikes in the last decades, but did not slow down as much as Lowe’s in 2023 and 2024. Actually Home Depot announced a 7.7% hike this year, preceeded by a 10% hike in 2023. Home Depot now has a 2.7% dividend yield at a stock price of $221 versus a 2.1% yield for Lowe’s at a stock price of $221.29. The dividend track record for Home Depot: 15 consecutive years of increases, significantly lagging Dividend Aristocrat Lowe’s.
Dividend Aristocrat Status
The company's ability to increase its dividend for over 25 consecutive years has earned it the status of a Dividend Aristocrat. This elite group consists of companies in the S&P 500 that have raised their dividends for at least 25 consecutive years, reflecting a strong track record of financial health and shareholder value creation.
Conclusion
Lowe’s continues to demonstrate its commitment to shareholders through consistent dividend increases, even amidst challenging economic conditions. The latest hike to $1.15 per share underscores the company's robust financial position and its dedication to rewarding its investors.
For more detailed financial information and future updates, shareholders and investors are encouraged to visit Lowe's investor relations page.
Disclaimer: The information provided here is for informational purposes only and should not be considered financial advice. Investors should conduct their own research or consult with a financial advisor before making any investment decisions.