Analyzing Lowe’s Companies (LOW) and Its Peers

Lowe’s Companies (NYSE:LOW) is one of 14 publicly-traded companies in the “RETAIL – HOME FRN” industry, but how does it contrast to its peers? We will compare Lowe’s Companies to similar companies based on the strength of its earnings, analyst recommendations, institutional ownership, dividends, risk, profitability and valuation.

Volatility and Risk

Lowe’s Companies has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Lowe’s Companies’ peers have a beta of 1.46, indicating that their average stock price is 46% more volatile than the S&P 500.

Institutional & Insider Ownership

74.1% of Lowe’s Companies shares are held by institutional investors. Comparatively, 67.1% of shares of all “RETAIL – HOME FRN” companies are held by institutional investors. 0.3% of Lowe’s Companies shares are held by insiders. Comparatively, 5.2% of shares of all “RETAIL – HOME FRN” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Lowe’s Companies pays an annual dividend of $4.60 per share and has a dividend yield of 2.0%. Lowe’s Companies pays out 38.1% of its earnings in the form of a dividend. As a group, “RETAIL – HOME FRN” companies pay a dividend yield of 2.4% and pay out 49.0% of their earnings in the form of a dividend. Lowe’s Companies has increased its dividend for 53 consecutive years.

Profitability

This table compares Lowe’s Companies and its peers’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lowe’s Companies	8.22%	-49.12%	15.07%
Lowe’s Companies Competitors	6.52%	33.77%	8.67%

Earnings & Valuation

This table compares Lowe’s Companies and its peers gross revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Lowe’s Companies	$83.67 billion	$6.96 billion	18.89
Lowe’s Companies Competitors	$26.26 billion	$2.36 billion	17.62

Lowe’s Companies has higher revenue and earnings than its peers. Lowe’s Companies is trading at a higher price-to-earnings ratio than its peers, indicating that it is currently more expensive than other companies in its industry.

Analyst Ratings

This is a summary of recent ratings and price targets for Lowe’s Companies and its peers, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lowe’s Companies	1	9	16	0	2.58
Lowe’s Companies Competitors	173	1317	2029	38	2.54

Lowe’s Companies presently has a consensus price target of $271.12, indicating a potential upside of 18.91%. As a group, “RETAIL – HOME FRN” companies have a potential upside of 15.03%. Given Lowe’s Companies’ stronger consensus rating and higher possible upside, equities research analysts plainly believe Lowe’s Companies is more favorable than its peers.

Summary

Lowe’s Companies beats its peers on 10 of the 15 factors compared.

Lowe’s Companies Company Profile

Lowe’s Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, décor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, renters, businesses, and government. The company also sells its products through Lowes.com website; and through mobile applications. Lowe’s Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.