Dividend Aristocrat Overview: Lowe’s Companies, Inc.

About Lowe’s

Originally started as a small hardware store in North Carolina in 1946, Lowe’s now operates over 1800 stores across the United States, Canada, and Mexico and employs 260,000 people.  It is the 2nd largest home improvement retailer in the world.

Lowe's has increased annual dividends each year since 1984. Photo courtesy Mike Mozart/JeepersMedia via flickr.com.

Lowe’s has increased dividends each year since 1984.
Photo courtesy Mike Mozart/JeepersMedia via flickr.com.

Lowe’s earned $2.3 billion on $53.4 billion in sales in 2013.  In addition to major name brands of home improvement products, Lowe’s also markets products under several private labels including Kobalt® hand tools, Blue Hawk® underlayments, Harbor Breeze® ceiling fans, Sta-Green® Lawn Care products, and Master Forge® grills.

The company is a member of the S&P 500 index and a Fortune 100 company, and trades under the ticker symbol LOW.

Lowe’s Dividend and Stock Split History

Lowe’s has been a Dividend Aristocrat since 2008 and, as of 2014 will have increased regular dividends for 31 consecutive years.  In addition, Lowe’s has paid dividends in every quarter since going public in 1961. Since 2004, Lowe’s has increased the quarterly dividend in the 3rd quarter of the calendar year; the next dividend increase is expected to be announced at the next shareholder’s meeting in late May and be paid out in August.

Lowe’s has developed an excellent track record over the last 11 years, with double digit percentage increases from year to year, except for one year during the worst of the recession in 2008 – 2009.  In 2014, Lowe’s increased the quarterly dividend by 27.8%, from 18 to 23 cents per share.  Over the last 5 years (2009 – 2014), Lowe’s has more than doubled the annual dividend payment – each share paid 35 cents in 2009 and is projected to pay 82 cents in 2014 – with a compounded annual dividend growth rate (CADGR) of 15.56%.  The CADGR over 10 and 20 years has been 27.90% and 20.05%, and over 25 years the CADGR has been 17.29%.  These long-term dividend growth rates are some of the best among all the Dividend Aristocrats.

Since coming public on October 10, 1961 Lowe’s has split 12 times with 2 for 1 splits in April 1966, November 1969, June 1992, April 1994, June 1998, June 2001, and June 2006.  The company also split the stock 3 for 2 in November 1971, June 1976, and November 1981; 5 for 3 in April 1983; and 4 for 3 in July 1972.  The company paid out 33.6 cents per share in dividends in 1983, when the company began its streak of increasing dividends.  100 shares purchased at the beginning of 1983 that collected $33.60 in dividends would have split into 5,333.33 shares by 2006.  In 2013, those shares would have collected over $3600 in dividends.  Had the dividends been reinvested, the increase in value would be even greater.

Lowe’s Direct Purchase and Dividend Reinvestment Plans

Lowe’s has both direct purchase and dividend reinvestment plans. Investors interested in participating in either of these plans can find information at Computershare’s Investment Plan site.  The minimum initial investment amount for new investors is $250 and $25 for recurring investments through direct debit.  The minimum for additional investments is $25.

The plans have both purchase and sales fees.  There is a $5 initial setup fee. The transaction fee for the direct purchase plan is 5% of the investment, up to $2.50, along with a 5 cent per share brokerage fee.  Lowe’s pays the fees for purchases made by reinvesting dividends.

When selling shares, an investor will pay 12 cents per share sold along with a transaction fee of either $15 or $25 depending on the type of sale (i.e., market order, batch order or day limit order).  Other fees may apply as well.

Helpful Links

Lowe’s Investor Relations Website

Current quote and financial summary for Lowe’s (finviz.com)

Information on the direct purchase and dividend reinvestment plans for Lowe’s

One thought on “Dividend Aristocrat Overview: Lowe’s Companies, Inc.

  1. Pingback: Dividend Aristocrats Week in Review: Lowe's Increases Dividend for 31st Year

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