Lowe's Companies Inc
🇺🇸 LOW · NYSE/NASDAQ · US5486611073
Consumer
USD 231.03 price at analysis
Scores
Key Metrics
Powered by EODHDP/E (TTM)
19.4
P/E (Price-to-Earnings)Shows how much investors pay for each $1 of profit. We display the TTM P/E (Trailing Twelve Months) which uses actual earnings from the last 4 quarters. This is more reliable than Forward P/E which uses analyst estimates.
Calculation: 231.03 ÷ 11.88 = 19.4
TTM period through: 2026-01-31
Forward P/E (estimated): 18.7
Based on analyst estimates
Reference: Provider P/E (Trailing): 19.5
Yield (Fwd)
2.08%
Dividend YieldThe Forward yield (Fwd) shows the next announced annual dividend / current price — what you'd earn going forward. The Trailing yield (TTM) in the tooltip shows dividends actually paid in the last 12 months. Forward is shown as primary because it reflects the company's current commitment to shareholders.
Trailing Yield (TTM): 2.01%
Net Debt/EBITDA (TTM)
0.6x
Latest quarter: 3.3x
Net Debt / EBITDAA leverage ratio showing how many years of EBITDA (earnings before interest, taxes, depreciation, and amortization) it would take to repay net debt. EBITDA approximates operating cash generation. Lower ratios (e.g., <3x) are generally safer; higher (e.g., >5x) may indicate more financial risk.
TTM through: 2026-01-31
Latest quarter (2026-01-31): 3.3x
The quarterly value can spike when quarterly EBITDA is very low (e.g., one-time charges).
Quick guide: <2x manageable, >4x can be risky (sector-dependent).
Payout (Fwd)
40.4%
Payout RatioDividends as a percentage of earnings. The Forward payout (Fwd) uses the announced dividend divided by actual past earnings (TTM) — it tells you if the company can afford what it promised. Very high payouts can be risky, especially if profits fall.
Announced dividend / actual earnings (TTM)
Payout (TTM): 39.6%
Cash Flow Payout (TTM): 26.7%
FCF Coverage (TTM): 2.90x
EV/EBITDA
14.1x
EV/EBITDAA valuation ratio that compares total business value (including debt) to EBITDA. Lower can mean cheaper, but context matters.
Summary
Lowe's is a dominant home improvement retailer operating in a highly profitable duopoly with a wide economic moat and a pristine balance sheet. While the underlying business quality is exceptional with strong dividend growth and robust cash flow coverage, current valuation at a P/E of 19.4 and a 2.01% yield offers limited upside. Existing shareholders should maintain their positions, but new investors may want to wait for a better entry point.
Sector Context
Lowe's is a leading home improvement retailer that generates revenue by selling building materials, decor, and supplies to both DIY retail consumers and professional contractors. While the consumer discretionary/home improvement sector is cyclical and tied to interest rates and housing turnover, dominant operators generate massive free cash flow that supports aggressive long-term dividend growth and share repurchases.
Temporary Opportunity Identified
Experiencing a cyclical downturn in the housing market and reduced discretionary DIY spending driven by elevated interest rates and inflationary pressures.
📊 Strategy Analysis
- • Operates in a highly rational home improvement duopoly, creating a wide economic moat and strong pricing power.
- • Pristine balance sheet with a Net Debt/EBITDA of 0.58x, providing excellent financial flexibility.
- • Exceptional dividend safety with free cash flow covering the dividend 2.9 times and a very conservative cash flow payout ratio of 26.7%.
- • Strong track record of capital return, highlighted by a 15.6% dividend CAGR over the past decade.
⚠ What to Watch
- • Current valuation at a P/E of 19.44 reflects a premium multiple that offers a limited margin of safety.
- • Dividend yield of 2.01% falls below the strategy's target minimum of 3% for immediate income generation.
- • Navigating near-term cyclical headwinds, with revenue and earnings declining over the past eight quarters due to elevated interest rates and a sluggish housing market.
📊 Historical Trends (10 Years)
Powered by EODHDThese charts show how key metrics have evolved over the past decade, helping you identify if the company is improving or deteriorating.
Debt Evolution (Net Debt / EBITDA)
Lower values are better. A declining trend indicates the company is reducing its debt (deleveraging).
Revenue & Earnings Growth
Consistent growth in revenueRevenue
The money a company brings in from selling its products or services. It’s the top line before costs. (blue) and earningsEarnings (Profit)
What’s left after expenses. Positive earnings mean the business made a profit; negative means a loss. (green) indicates a healthy business. Look for upward trends and recoveries after temporary dips.
Dividend Sustainability (FCF vs Dividends Paid)
Free cash flowFree Cash Flow
Cash left after the company pays for running the business and maintaining it. Often used to fund dividends, pay debt, or buy back shares. (FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., blue) should cover dividends paidDividends Paid
Cash the company paid out to shareholders. It’s not guaranteed and can change over time. (green). If dividends consistently exceed FCFFCF (Free Cash Flow)
Short for Free Cash Flow: cash left after operating needs and maintenance spending., the dividend may be at risk.
Analysis date: 2026-04-04
Disclaimer: This information is for educational purposes only. Not financial advice.