The Dynamic Dividend

Disappointing Outlook Keeps Lowe’s Yield at Historic High

Lowe’s Companies (LOW) reported disappointing second quarter results this morning, and gave an even uglier forecast for the rest of the year.

The home improvement giant earned an adjusted $0.68 per share on $14.54 billion in revenue during the second quarter quarter, edging the consensus profit view ($0.66 per share) but falling short of the average sales estimate ($14.75 billion).

For the full year, the company said it now expects to earn an adjusted $1.42 to $1.48 per share on 2% sales growth, neither of which is in the ballpark of Wall Street’s expectations. The average analyst forecast currently calls for earnings of $1.62 per share and $50.31 billion in revenue, which would require 3.1% sales growth.

Shares of LOW are currently trading at $18.49 (-5.23%) in pre-market trading, where they yield 3.03%.

As you can see from the chart below, the stock has rarely featured a yield this high. In fact, despite nearly 50 years of consistent dividend growth, it took the recent selloff of the broader market to finally push its yield over the 3% threshold for the very first time.

Lowe’s has increased its dividend output every year dating back to 1963, most recently giving shareholders a 27% raise in May. Since 2003, the Class B Dividend Dynamo has improved its payout by more than 1,000%.