4-Star Stocks Poised to Pop: Lowe's
Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool's free investing community, home improvement retailer Lowe's Companies (NYS: LOW) has earned a respected four-star ranking.
With that in mind, let's take a closer look at Lowe's and see what CAPS investors are saying about the stock right now.
|Headquarters (Founded)||Mooresville, N.C. (1952)|
|Market Cap||$25.6 billion|
|Industry||Home improvement retail|
|Trailing-12-Month Revenue||$48.6 billion|
Chairman/CEO Robert Niblock
CFO Robert Hull
|Return on Equity (Average, Past 3 Years)||10.8%|
|Cash/Debt||$1.84 billion / $6.58 billion|
Home Depot (NYS: HD)
Target (NYS: TGT)
Wal-Mart (NYS: WMT)
Sources: Capital IQ (a division of Standard & Poor's) and Motley Fool CAPS.
Late last month, TheNoobInvestor tapped Lowe's as a tempting income opportunity:
If the housing market rises, which eventually will happen (fingers crossed), then so will this stock. Might as well get in on it while it's lowe ;) and collect a dividend while you ride it out. It is a dividend aristocrat after all!
Over the past five years, in fact, Lowe's has grown its dividend at a brisk rate of 30% annually. That's faster than big-box rivals Home Depot (14%), Target (20%), and Wal-Mart (16%).
CAPS member Sharpfool213 elaborates on the bull case:
With Lowe's, you're getting a low-risk home improvement business for cheap. Home ownership will increase in the long term, despite experiencing declines due to mortgage crisis. Another trend favoring this industry long term is the increase in the number of homes over 25 years old, which is expected to be as high as 75% of all homes. ...
Fewer new stores during times like these is not necessarily a bad thing. I think management is taking appropriate measures in anticipation of slow growth in the short term.
The company pays a steady dividend of 2.7%, which increased ~ 46% in FY11. Lowe's looks like a bargain with $13/share in book value and a P/E lower than its 10 year average. Fair value is closer to $30 than the current price.
What do you think about Lowe's, or any other stock for that matter? If you want to retire rich, you need to put together the best portfolio you can. Owning exceptional stocks is a surefire way to secure your financial future, and on Motley Fool CAPS, thousands of investors are working every day to find them. CAPS is 100% free, so get started!
Interested in another easy way to track Lowe's?Add it to your watchlist.
At the time this article was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. Motley Fool newsletter services have recommended buying shares of Lowe's, Home Depot, and Wal-Mart; writing covered calls in Lowe's; and creating a diagonal call position in Wal-Mart. The Fool owns shares of Wal-Mart. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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