Dividend Aristocrats In Focus: Lowe’s Companies

Updated on March 10th, 2026 by Felix Martinez

Lowe’s Companies (LOW) has a highly impressive long-term dividend growth track record. The company has increased its dividend for over 62 consecutive years. This makes Lowe’s a rare dividend stock, even among the Dividend Aristocrats, as the company qualifies for Dividend King status thanks to more than 5 decades of annual dividend increases.

Every year, we review each of the Dividend Aristocrats,  a group of 69 companies in the S&P 500 Index with 25+ consecutive years of dividend increases.

We have built a full list of all 69 Dividend Aristocrats. You can download a free copy of our Dividend Aristocrats list, along with important metrics like dividend yields and payout ratios, by clicking on the link below:

Disclaimer: Sure Dividend is not affiliated with S&P Global in any way. S&P Global owns and maintains The Dividend Aristocrats Index. The information in this article and downloadable spreadsheet is based on Sure Dividend’s own review, summary, and analysis of the S&P 500 Dividend Aristocrats ETF (NOBL) and other sources, and is meant to help individual investors better understand this ETF and the index upon which it is based. None of the information in this article or spreadsheet is official data from S&P Global. Consult S&P Global for official information.

In addition to being a Dividend Aristocrat, Lowe’s is on the exclusive list of Dividend Kings, which have raised their dividends for an amazing 50+ years in a row. You can see the entire list of Dividend Kings here.

Lowe’s is also a high-growth dividend stock. This article will discuss Lowe’s business model, growth potential, and valuation.

Business Overview

Lowe’s was founded in 1946. In the nearly 80 years since, it has grown into the second-largest home improvement retailer, behind only The Home Depot (HD).

The company operates more than 1,700 stores in the U.S., Canada, and Mexico. Lowe’s offers a wide range of products for home maintenance, repair, remodeling, and decorating. It has a wide selection of leading national brands, as well as a large number of private brands.

Lowe’s reported fourth-quarter fiscal 2025 revenue of $20.6 billion, representing a 10.9% year-over-year increase, while adjusted diluted EPS reached $1.98, beating expectations and rising 2.6% from the prior year’s adjusted $1.93. Reported diluted EPS was $1.78, compared with $1.99 in Q4 2024, primarily due to $149 million in pre-tax expenses related to the acquisitions of Foundation Building Materials and Artisan Design Group.

Net earnings for the quarter totaled $999 million, while comparable sales increased 1.3%, supported by continued growth in Pro customers, online channels, and home services, as well as strong holiday demand.

Profitability metrics showed some pressure despite higher sales. Gross margin declined slightly to 32.46% from 32.86%, while operating income decreased to $1.71 billion, representing an 8.3% operating margin, down from 9.9% in the prior-year quarter.

Higher selling, general, and administrative expenses—partly tied to acquisitions and growth initiatives—contributed to the margin compression. During the quarter, the company returned $673 million to shareholders through dividends, reflecting its continued focus on capital returns.

For full-year fiscal 2025, Lowe’s generated $86.3 billion in revenue, up from $83.7 billion in the prior year, while net earnings totaled $6.65 billion, slightly below $6.96 billion in fiscal 2024. The company reported diluted EPS of $11.85, compared with $12.23 the previous year, while returning $2.6 billion to shareholders via dividends.

Looking ahead to fiscal 2026, management expects revenue of $92–$94 billion, comparable sales between flat and up 2%, operating margins of 11.2%–11.4%, and adjusted EPS of $12.25–$12.75, supported by ongoing productivity initiatives and growth across Pro, online, and home services channels.

Source: Investor presentation

Growth Prospects

We believe that Lowe’s will deliver 8% annual earnings-per-share growth over the next five years. Lowe’s has a long runway ahead.

In recent years, Lowe’s has made a concerted effort to improve its customers’ in-store experience through merchandising and inventory practices, as well as investing in capabilities to fulfill orders outside its stores.

This includes special features for Pro customers that drive recurring revenue and make it easier for DIY customers to order their products online, and pick them up or have them delivered. This is a strategic shift from the old model Lowe’s operated under, and it has worked well in recent years.

Lowe’s generally opens a small number of new stores each year, which is not a meaningful driver of growth. However, it continues to capitalize on rising housing and construction spending, and we see these as growth drivers moving forward, given still relatively low mortgage rates, whether or not the store count rises.

The U.S. economy continues to grow despite headwinds such as high inflation. Positive GDP growth is arguably the most important economic indicator for Lowe’s, as the company is highly reliant on consumer spending. The continued U.S. economic growth is a positive catalyst for Lowe’s.

Lowe’s has steadily been repurchasing shares on the open market in recent years. These buybacks shrink the company’s share count, translating into a growing share of overall profits for each remaining share.

Buybacks have been a major driver in the compelling earnings-per-share growth that Lowe’s has enjoyed, and we believe the same will hold true in the future.

The combination of continued e-commerce expansion, long-term economic growth, and operating performance should drive Lowe’s profits. With the impact of buybacks added, we believe annual earnings-per-share growth of 8% is very much achievable.

Competitive Advantages & Recession Performance

The retail industry typically offers few competitive advantages. This is a highly challenging retail environment, as the rise of Amazon and other Internet retailers threatens to undercut brick-and-mortar stores. Consumers have shifted spending dollars toward e-commerce for the convenience and low prices.

However, Lowe’s is a specialty retailer, which gives it a competitive advantage. Home improvement projects are often complex. Consumers are willing to travel to stores, inspect products in person, and ask staff questions, which has helped protect home improvement retailers from Amazon (AMZN).

That said, Lowe’s is not immune to recessions. The consumer is at risk of declining during economic downturns. Lowe’s depends on a financially healthy consumer with solid housing and construction markets. The Great Recession was a particularly steep downturn that significantly affected Lowe’s bottom line.

Lowe’s earnings-per-share during the Great Recession are below:

2007 earnings-per-share of $1.86
2008 earnings-per-share of $1.49 (20% decline)
2009 earnings-per-share of $1.21 (19% decline)
2010 earnings-per-share of $1.44 (19% increase)

Lowe’s earnings fell sharply during the recession, but the company remained profitable. This helped it continue increasing its dividend each year. And it bounced back reasonably quickly, as by 2013, Lowe’s earnings-per-share had surpassed 2007 levels.

Valuation & Expected Returns

Lowe’s is expected to generate adjusted EPS of $12.50 for 2026. As a result, the stock trades at a price-to-earnings ratio of 20.1. This is above our fair value estimate of 20, so we see the stock as slightly overvalued. A contracting price-to-earnings ratio could reduce future returns by approximately 0.1% per year for the next five years.

In addition to valuation changes, Lowe’s returns will consist of earnings growth and dividends.

We see annual earnings-per-share growth of 7%, plus the current 1.9% yield, offset somewhat by a declining valuation multiple. That would produce overall annual returns of approximately 8.8%, an appealing potential rate of return.

The dividend payout ratio remains near 38% of earnings, so there is certainly plenty of room for additional dividend growth in the coming years.

Final Thoughts

Lowe’s has increased its dividend for 62 consecutive years. Although the current retail environment is challenging, Lowe’s operates in a niche that should withstand competitive threats from online retailers.

Lowe’s is still growing sales and earnings, which should allow for continued dividend growth. It also has a conservative dividend payout ratio, which supports high dividend increases. With an expected rate of return under 8.8% per year, Lowe’s stock receives a hold rating at current prices.

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