Lowe’s shares rise as shareholders take advantage of higher dividends

In order to generously reward its shareholders, Lowe’s Companies, Inc. (NYSE: LOW) announced a 31% hike in its quarterly dividend yield. The home improvement products supplier has been paying dividends for more than 60 years.

Following the announcement, shares of the $127.6 billion company rose 2.1% to close at $199.63 on Friday.

Inside the title

The higher dividend was approved by Lowe’s board of directors, with the quarterly rate now set at $1.05 per share from the previous rate of $0.80 per share. The annualized rate is now $4.20 per share, compared to the previous rate of $3.20 per share.

The company has planned to distribute dividends (according to the new rate) on August 3, 2022. All shareholders registered in the company’s register on July 20, 2022 will be entitled to receive this dividend.

The Company’s Chairman, President and Chief Executive Officer, Marvin R. Ellison, said, “Today’s dividend increase reflects the strength and consistency of our cash flow and our continued commitment to return the capital to our shareholders.

A Shareholder Reward Overview

Lowe’s distributed dividends totaling $1,984 million in fiscal 2021 (ended January 28, 2022) and $537 million in the first quarter of fiscal 2022 (ended April 29, 2022).

The company has also rewarded its shareholders with share buybacks, which amounted to $13,012 million in fiscal 2021 and $4,037 million in the first quarter of fiscal 2022.

Stock Valuation

Overall, the street is optimistic about LOW’s growth prospects and has a strong buy consensus rating based on 13 buys and four holds. LOW’s average price prediction of $236.67 suggests upside potential of 18.55% from current levels.

A few days ago, Evercore ISI’s Greg Melich reiterated a buy rating on LOW with a price target of $235 (upside potential of 17.72%).

Over the past year, shares of Lowe’s have risen 4.1%.

Position of bloggers

Financial bloggers on TipRanks are 92% bullish on LOW, compared to an industry average of 65%.

Conclusion

The company’s commitment to rewarding its shareholders is beneficial to the stock’s investment and its competitive appeal. Additionally, it reflects the strength of the company’s cash flow and financial position.

Read full disclosure

Sallie R. Loera