uploads///Part

Investing in Lowe’s: The 2nd Largest Home Improvement Retailer

By

Jan. 27 2016, Updated 3:41 p.m. ET

Analyzing the business fundamentals of Lowe’s, a leader in home improvement retail

Lowe’s (LOW) is the second largest home improvement chain in the world. The chain is based in Mooresville, North Carolina, and has been around since 1946. It went public in 1961. The retailer operates a total of 1,849 stores in the US, Canada, and Mexico under its own brand and under the Orchard Supply Hardware banner, which operates in the states of California and Oregon only. The company also has a presence in Australia via a 33% owned joint venture with Woolworths[1. On January 18, 2016, Lowe’s announced it was exiting its home improvement business in Australia].

Article continues below advertisement

How Lowe’s stacks up against rivals

Lowe’s was ranked the 18th largest retailer globally in the National Retail Federation’s 2014 rankings. The company has a market cap of $64.5 billion[2. As on January 22, 2016] and is part of the Fortune 50, according to 2015 company rankings. Rival Home Depot (HD), Lowe’s staunchest competitor, and the world leader in the home improvement retail business, is ranked 33.

Both Home Depot and Lowe’s are part of the holdings in the SPDR S&P Homebuilders ETF (XHB), together making up 9.6% of XHB’s portfolio.

Lowe’s clocked sales of $58.4 billion in the trailing 12 months. In comparison, competitors Home Depot (HD), Restoration Hardware (RH), and Williams-Sonoma (WSM) reported sales of $86.7 billion, $2.0 billion, and $4.9 billion, respectively, in their last four quarters.

Returns record

Lowe’s is a dividend aristocrat (SDY), having raised its dividend each year since 1961. The company has posted total annualized returns of 25.2% over the past five years compared to 16.1% for the S&P 500 Consumer Discretionary Sector Index (XLY) (FXD) (VCR).

In terms of recent performance, the company has posted positive same-store sales growth for ten consecutive quarters with comparable store sales growth of 4.3% in fiscal 2015[3. Fiscal year ending January 30, 2015].

Advertisement

More From Market Realist

  • SemiLEDS logo over LED lighting
    Company & Industry Overviews
    There's Still Time to Get in on SemiLEDS (LEDS) Stock
  • Trader on the NYSE
    Company & Industry Overviews
    What Are the Most Expensive Stocks Ever?
  • Michelob Ultra beer
    Company & Industry Overviews
    AB InBev Is the Top Beer Brand Worldwide—Is It a Monopoly?
  • Businesswoman looking out a window
    Company & Industry Overviews
    Shifting Focus: Three Women Investing Funds in 2021
  • CONNECT with Market Realist
  • Link to Facebook
  • Link to Twitter
  • Link to Instagram
  • Link to Email Subscribe
Market Realist Logo
Do Not Sell My Personal Information

© Copyright 2021 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.