LOW
Lowe's Companies, Inc.
Consumer Cyclical · Home Improvement Retail · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The dividend factor is the standout strength, reflecting four consecutive years of per-share dividend growth and a conservative 39.6% payout ratio that leaves room for future increases.
- Profitability is above midpoint with solid margins and asset returns, but growth is mixed — revenue expanded while net income and EPS contracted — pulling the composite score below the upper tier.
- The zero contribution from the theme factor and a below-midpoint momentum score, driven by visible quarterly deceleration, cap the overall composite at 59.4/100.
Why Not Higher
- Bottom-line contraction — net income down 4.4% and diluted EPS down 3.1% in FY2026 — alongside a clear deceleration in quarterly earnings through 2026Q4 weighed heavily on the growth and momentum factors.
- The absence of any macro theme assignment means Lowe's receives no thematic tailwind score, leaving 20 potential points entirely unclaimed.
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2025's $83,674,000,000 to FY2026's $86,286,000,000, a gain of 3.1%, but net income declined 4.4% from FY2025's $6,957,000,000 to FY2026's $6,654,000,000, and diluted EPS fell 3.1% from FY2025's $12.23 to FY2026's $11.85.
The model rewarded modest top-line expansion but penalized the simultaneous contraction in bottom-line earnings and per-share profitability, producing a below-midpoint score that reflects mixed growth signals.
In FY2026, Lowe's posted a net margin of 7.7%, an operating margin of 11.8%, and a return on assets of 12.3%.
These figures indicate solid operational efficiency and asset productivity, which the model recognized with an above-midpoint score, though there remains room relative to the highest-tier benchmarks.
Filing evidence currently available does not support a more specific explanation for this factor.
Over the last four quarters, revenue peaked in 2026Q2 at $23,959,000,000 then declined to $20,813,000,000 in 2026Q3 and $20,584,000,000 in 2026Q4; net income similarly peaked at $2,398,000,000 in 2026Q2 before falling to $1,616,000,000 in 2026Q3 and $999,000,000 in 2026Q4; operating income followed the same arc, reaching $3,469,000,000 in 2026Q2 and dropping to $1,709,000,000 in 2026Q4.
The model observed a clear deceleration pattern across revenue, net income, and operating income in the second half of the trailing four quarters, which tempered the momentum score to just below the midpoint.
Dividends per share have risen consecutively from $3.95 in FY2023 to $4.35 in FY2024, $4.55 in FY2025, and $4.75 in FY2026, while the FY2026 payout ratio stood at a sustainable 39.6% of net income.
The model rewarded the consistent multi-year dividend growth trajectory combined with a payout ratio that leaves meaningful earnings retained, reflecting both shareholder return commitment and financial prudence.
Lowe's is not currently assigned to any of the 24 tracked macro themes in the model.
The absence of a theme assignment means no thematic tailwind contributed to the score; this is a neutral characteristic of the current model classification rather than a reflection of the company's business quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
Lowe's Companies, Inc. earned a composite score of 59.4/100 and is classified as a Dividend Candidate with a Very Low risk rating. The company delivered modest top-line growth of 3.1% in FY2026, but net income and diluted EPS both contracted, creating a mixed growth picture. Profitability metrics remain solid, with a 7.7% net margin, 11.8% operating margin, and 12.3% return on assets, while the dividend track record stands out with four consecutive years of per-share increases and a sustainable 39.6% payout ratio. Quarterly momentum decelerated notably in the second half of FY2026, and the absence of a macro theme assignment left thematic tailwind out of the equation.
Plain English
Lowe's is bringing in more revenue than last year, but its profits actually dipped, and its quarterly results have been slowing down lately — the bright spot is that it keeps raising its dividend every year while still holding onto a healthy chunk of its earnings.
Bull Case vs. Bear Case
Bull Case
- Lowe's has raised its dividend per share every year from $3.95 in FY2023 to $4.75 in FY2026, and the payout ratio of 39.6% shows the company is returning cash to shareholders without overextending itself.
- Solid profitability metrics — a 7.7% net margin, 11.8% operating margin, and 12.3% return on assets — indicate the business generates meaningful earnings and uses its assets efficiently.
- Revenue grew 3.1% year-over-year to $86,286,000,000 in FY2026, demonstrating continued top-line expansion even in a challenging environment.
Bear Case
- Net income fell 4.4% from $6,957,000,000 in FY2025 to $6,654,000,000 in FY2026, and diluted EPS dropped 3.1% from $12.23 to $11.85, signaling that bottom-line profitability is under pressure despite revenue growth.
- Quarterly results show a clear deceleration: revenue peaked at $23,959,000,000 in 2026Q2 and fell to $20,584,000,000 by 2026Q4, while net income dropped from $2,398,000,000 to just $999,000,000 over the same period.
- Lowe's is not assigned to any of the 24 tracked macro themes, meaning no thematic tailwind is contributing to its score or near-term narrative.
What Could Change the Picture
Bullish Triggers
- A reversal in the quarterly earnings deceleration — particularly net income recovering from the $999,000,000 level seen in 2026Q4 — would signal renewed bottom-line momentum and could strengthen the growth and momentum factors.
- Continued dividend increases beyond the $4.75 per share level in FY2026, especially if paired with a stable or improving payout ratio, would reinforce the Dividend Candidate thesis.
Bearish Triggers
- If net income continues to decline beyond the 4.4% drop already seen from FY2025 to FY2026, the sustainability of dividend growth and the current payout ratio could come into question.
- A further steepening of the quarterly revenue and operating income decline seen in the back half of FY2026 would deepen concerns about business momentum.
Risk Profile
Very Low RiskThe Very Low risk rating reflects the company's substantial asset base of $54,144,000,000 and the financial health factor's near-top score, suggesting a stable balance sheet foundation. However, the momentum factor highlights a meaningful deceleration in revenue, net income, and operating income across the back half of FY2026, which represents an operational risk worth monitoring.
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.