Lowe's Companies, Inc. (NYSE:LOW)

Lowe's Home Improvement Warehouse is an American retail chain specializing in construction and gardening equipment for individuals founded in 1946. Lowe's is the second largest hardware chain in the world, behind Home Depot but ahead of European giants B&Q and OBI. The chain now has more than 14 million customers per week in its stores. 1,710 stores in the United States and 20 in Canada.

The progression of the LOW price since 1980 is particularly strong. Next to it, the S&P is almost pitiful. It is interesting to see the divergence between LOW and the market in the early 2000s, linked to the drop in interest rates and the real estate bubble that followed. While most stocks collapsed with the bursting of the Internet bubble, LOW continued to progress, reaching its peak in 2006. As early as 2007, one year before the subprime crisis, the stock underwent a significant correction, until 2009. Since then, the stock has again followed the market trend, which is confirmed by a beta of 0.99.

The current yield of 2% is not very high, but still higher than its long-term average (1.74%). In addition, THE average annual dividend growth rate, with 16.09% is particularly impressive, especially since the distribution ratio remains particularly low, at 3.06%. Lowe's therefore still has a lot of room to maneuver to increase its dividend in the future. It should also be noted that The company has been able to increase its distributions for 50 consecutive years, which proves the quality and sustainability of its business model.

The goods sold by the company are not essential, unlike retailers active in the food sector, such as Wal-Mart (NYSE:WMT). This less defensive orientation is felt through a volatility of 20.05%, which makes LOW one of the most volatile stocks in our portfolio.

Lowe's is very vulnerable to interest rates and the slowdown in the real estate market. The subprime crisis has also impacted the company. In addition, with a very clear majority of stores located in the United States, the company is still particularly exposed to the American market. This is confirmed by a $risk of 0.83, indicating that a fall in the dollar is traditionally accompanied by a fall in the value of the share in CHF.

However, expansion into Canada began with the opening of a store in Hamilton, Ontario in early 2008. Lowe's also initiated the construction of stores in MexicoIn 2011, Lowe's released plans to build more than 150 stores in Australia over the next 5 years, hoping to rival the 46 billion Australian dollars of the industry.

Our analysis model considers that LOW is a purchase opportunity to date. The modest yield, volatility and high currency risk are more than offset by a strong dividend growth rate, a low payout ratio and an impressive track record of successive dividend increases.

Sources: Wikipedia, Wikinvest, Swissquote, Yahoo Finance, dividends.ch