(05-28-2021, 09:45 AM)EricL Wrote: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.(05-28-2021, 09:01 AM)fenders53 Wrote:(05-28-2021, 08:14 AM)EricL Wrote: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.(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.
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.
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.