Very nice raise from LOW! A little weak from AMT which I own but the share price is doing well.
(05-27-2021, 04:33 PM)fenders53 Wrote: [ -> ]Very nice raise from LOW! A little weak from AMT which I own but the share price is doing well.
AMT raises every quarter, so it's not a large increase every time.
(05-27-2021, 04:56 PM)EricL Wrote: [ -> ] (05-27-2021, 04:33 PM)fenders53 Wrote: [ -> ]Very nice raise from LOW! A little weak from AMT which I own but the share price is doing well.
AMT raises every quarter, so it's not a large increase every time.
I own few shares and I wasn't paying attention. Not so bad then. Thanks.
(05-27-2021, 03:59 PM)EricL Wrote: [ -> ]Booyah!
Lowe's (NYSE:LOW) declares $0.80/share quarterly dividend, 33.3% increase from prior dividend of $0.60.
Forward yield 1.65%
Payable Aug. 4; for shareholders of record July 21; ex-div July 20.
This is absolutely MASSIVE.
I can't complain since LOW is one of my largest holdings... but I am kind of skeptical as to how sustainable it is to do these massive raises when the macro-economic stuff is obviously providing a massive short term boost to earnings.
Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
(05-28-2021, 06:16 AM)fenders53 Wrote: [ -> ]Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
Cool. LOW is the least valued position I have in my taxable account so I look forward to increasing my share count when I can.
(05-28-2021, 06:16 AM)fenders53 Wrote: [ -> ]Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
LOW has guided for a 35% payout ratio, and this raise puts the payout ratio at 36% of current estimates of $8.86 in earnings in 2021.
Earnings are forecast to rise another 24% in 2022, so this may not be the last of big increases.
For comparison, HD targets a 55% payout ratio, so it appears that Lowe's is quite safe.
(05-28-2021, 08:14 AM)EricL Wrote: [ -> ] (05-28-2021, 06:16 AM)fenders53 Wrote: [ -> ]Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
LOW has guided for a 35% payout ratio, and this raise puts the payout ratio at 36% of current estimates of $8.86 in earnings in 2021.
Earnings are forecast to rise another 24% in 2022, so this may not be the last of big increases.
For comparison, HD targets a 55% payout ratio, so it appears that Lowe's is quite safe.
Agreed. I just wouldn't expect 35% again. 25% earnings growth is not permanent. I'll wager that. 5% was normal for a long time. Revenue growth is another matter. I can't believe the price increases at HD and wonder if they are permanent. Of course lumber is not. It will crash soon, but it is also low margin for LOW so not a big problem.
Not bashing LOW if any of the above came off like that.
(05-28-2021, 08:14 AM)EricL Wrote: [ -> ] (05-28-2021, 06:16 AM)fenders53 Wrote: [ -> ]Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
LOW has guided for a 35% payout ratio, and this raise puts the payout ratio at 36% of current estimates of $8.86 in earnings in 2021.
Earnings are forecast to rise another 24% in 2022, so this may not be the last of big increases.
First of all, thanks for those data points. It's really good info. And I have no questions about the payout ratio at the current earnings.
I am just quite skeptical of the earnings growth going forward. I think the stock is great, it's one of my largest holdings, I also really think the company has really improved during the years that I've been a shareholder.
But I see very little growth drivers from here.
-The housing market is already extremely overheated, that can't go on forever.
-covid restrictions will probably start to fade away globally sooner rather than later, which will most certainly take people out of the house more (= less need to spend money on renovations) and when travel, restaurants and social life in general open up to their normal levels, these will also drain the wallet of people who haven't had the chance to spend on experiences in over a year.
-those stimulus checks can't keep coming forever.
-I also have no idea what the current situation is for the average joe. But I would venture a guess that if you spent the better part of the last 12 months renovating your house, it should be more or less in shape soon.
Covid, stimulus checks and the super hot housing market are, in my view, the main reasons for the increased sales/earnings in 2020 and beginning of 2021. Once we take those away, I just don't see how 20% earnings growth will continue. I hope it does, in that case I'll be rich in no time with the amount of LOW that I own. I just think it's much more realistic to expect flat earnings for a couple of years (starting from 2022) since people will be spending on experiences rather than their home. As fenders put it, 5% used to be normal.
(05-28-2021, 09:01 AM)fenders53 Wrote: [ -> ] (05-28-2021, 08:14 AM)EricL Wrote: [ -> ] (05-28-2021, 06:16 AM)fenders53 Wrote: [ -> ]Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
LOW has guided for a 35% payout ratio, and this raise puts the payout ratio at 36% of current estimates of $8.86 in earnings in 2021.
Earnings are forecast to rise another 24% in 2022, so this may not be the last of big increases.
For comparison, HD targets a 55% payout ratio, so it appears that Lowe's is quite safe.
Agreed. I just wouldn't expect 35% again. 25% earnings growth is not permanent. I'll wager that. 5% was normal for a long time. Revenue growth is another matter. I can't believe the price increases at HD and wonder if they are permanent. Of course lumber is not. It will crash soon, but it is also low margin for LOW so not a big problem.
Not bashing LOW if any of the above came off like that.
Lowe's has grown EPS at a 10%+ annual rate in 17 of the last 21 years including this year.
The only years they didn't were the three years surrounding the '08/'09 housing bust and in 2013.
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Considering the low interest rates, low unemployment, and ongoing housing shortage we have in the country, I don't see any reason why they can't continue growing at a double-digit rate going forward.
(05-28-2021, 09:45 AM)EricL Wrote: [ -> ] (05-28-2021, 09:01 AM)fenders53 Wrote: [ -> ] (05-28-2021, 08:14 AM)EricL Wrote: [ -> ] (05-28-2021, 06:16 AM)fenders53 Wrote: [ -> ]Looks to be well covered. Their payout ratio was conservative. I wouldn't expect future increases like this. LOW competes with HD in every way and they were getting way behind on dividends.
LOW has guided for a 35% payout ratio, and this raise puts the payout ratio at 36% of current estimates of $8.86 in earnings in 2021.
Earnings are forecast to rise another 24% in 2022, so this may not be the last of big increases.
For comparison, HD targets a 55% payout ratio, so it appears that Lowe's is quite safe.
Agreed. I just wouldn't expect 35% again. 25% earnings growth is not permanent. I'll wager that. 5% was normal for a long time. Revenue growth is another matter. I can't believe the price increases at HD and wonder if they are permanent. Of course lumber is not. It will crash soon, but it is also low margin for LOW so not a big problem.
Not bashing LOW if any of the above came off like that.
Lowe's has grown EPS at a 10%+ annual rate in 17 of the last 21 years including this year.
The only years they didn't were the three years surrounding the '08/'09 housing bust and in 2013.
Considering the low interest rates, low unemployment, and ongoing housing shortage we have in the country, I don't see any reason why they can't continue growing at a double-digit rate going forward.
I appreciate the data. And have a view from "the floor". Admittedly I have only seen 3 years of real-time retail as this is only a retired gig but the attempts to make earnings every quarter have become insane. They gave us raises and cut the staffing even further to cover it. My store led the district it about every measure last year. The comps are ridiculous and we aren't beating last year by 10% so the pressure is on. Every day people tell me they came from Lowes because the millwork dept is never manned and it's a skilled position. Ours is only staffed half the time and we are busy working other depts that aren't staffed. I requested my days be cut in half for now because it's painful every day we are busy at all. I could go be a cashier at Target and get a 7% raise but I don't enjoy mindless work.
Is it possible earnings growth is 10% due to share buy backs? The answer is very likely yes. It's all good while the economy is rocking higher and I expect it will for another year.
Yes, share buybacks are indeed a big part of it, especially right now. LOW is buying back massive amounts.
But in the end I don't really care where that EPS boost comes from, as long as it comes.
