1. Lowe’s Companies, Inc. (NYSE:LOW)
5-Year Average Annual Dividend Growth Rate: 16.91%
Lowe’s Companies, Inc. (NYSE:LOW) is an American retail company that specializes in home improvement. The ongoing demand for construction, repair, and remodeling supplies provides a solid foundation for sustained growth, as long as the company remains focused on addressing customer needs. However, Lowe’s is currently feeling the impact of a slow-moving economy. In the most recent quarter, it reported revenue of $20.17 billion, which fell by nearly 2% from the same period last year. That said, the earnings slightly surpassed expectations, even without considering storm-related activity. High single-digit growth in Pro sales, robust online performance, and smaller-scale outdoor DIY projects supported this.
Madison Investments also highlighted this in its Q3 2024 investor letter. Here is what the firm has to say:
“In the third quarter, the top five individual contributors to performance relative to the benchmark were Parker-Hannifin Corporation, Fiserv, Lowe’s Companies, Inc. (NYSE:LOW), Brookfield Corporation, and Progressive Corporation. Despite operating in very different sectors, Lowe’s Companies and Brookfield Corporation are both expected to benefit from the economic activity spurred on by declining interest rates. The Federal Reserve’s decision to lower interest rates sparked investor enthusiasm for both companies during the quarter, even as their sales and profits continue to moderate. For Lowe’s, sales remained weak in the latest quarter as most measures of the housing market remain sluggish. However, if interest rates come down and mortgages become more affordable, activity should return to the housing market which will boost Lowe’s business.”
Lowe’s Companies, Inc. (NYSE:LOW) is one of the best dividend kings as the company has been growing its dividends for 59 consecutive years. The company offers a quarterly dividend of $1.15 per share and has a dividend yield of 1.68%, as recorded on December 9.
At the end of the third quarter of 2024, 60 hedge funds in Insider Monkey’s database owned stakes in Lowe’s Companies, Inc. (NYSE:LOW), compared with 62 in the previous quarter. The total value of these stakes is over $2.2 billion.
Overall, Lowe’s Companies, Inc. (NYSE:LOW) ranks first on our list of the best dividend kings. While we acknowledge the potential for LOW to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than LOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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