In a bid to reward its shareholders handsomely, Lowe’s Companies, Inc. (NYSE: LOW) has announced a 31% hike in its quarterly dividend rate. The provider of home improvement products has a history of paying dividends for more than 60 years.
Following the announcement, shares of the $127.6-billion company increased 2.1% to close at $199.63 on Friday.
Inside the Headline
The dividend hike has been approved by Lowe’s board of directors, with the quarterly rate now pegged at $1.05 per share versus the previous rate of $0.80 per share. The annualized rate now stands at $4.20 per share, compared with the previous rate of $3.20 per share.
The company has planned to distribute dividends (per the new rate) on August 3, 2022. All shareholders in the company’s record as of July 20, 2022, will be entitled to receive this dividend.
The company’s Chairman, President, and CEO, Marvin R. Ellison, said, “Today’s dividend increase reflects the strength and consistency of our cash flow and our continued commitment to returning capital to our shareholders.”
Shareholder-Friendly Approach
Lowe’s distributed dividends totaling $1,984 million in the Fiscal Year 2021 (ended January 28, 2022) and $537 million in the first quarter of Fiscal 2022 (ended April 29, 2022).
The company also rewarded its shareholders through share buybacks, which amounted to $13,012 million in Fiscal 2021 and $4,037 million in the first quarter of Fiscal 2022.
Stock Rating
Overall, the Street is optimistic about the growth prospects of LOW and has a Strong Buy consensus rating based on 13 Buys and four Holds. LOW’s average price forecast of $236.67 suggests 18.55% upside potential from current levels.
A few days ago, Greg Melich of Evercore ISI reiterated a Buy rating on LOW with a price target of $235 (17.72% upside potential).
Over the past year, shares of Lowe’s have increased 4.1%.
Bloggers’ Stance
Financial bloggers on TipRanks are 92% Bullish on LOW, compared with the sector average of 65%.
Conclusion
The company’s commitment to rewarding its shareholders is beneficial for the stock’s investment and competitive appeal. Also, it is reflective of the company’s sound cash and financial position.
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