Updated on July 9th, 2025 by Felix Martinez
The Dividend Kings are considered the best of the best when it comes to dividend growth stocks. There is good reason for this, as it is extremely difficult to become a Dividend King. That’s why there are only 55 of them out of the thousands of publicly traded companies. To be a Dividend King, a company must raise its dividend each year for over 50 years.
You can see the full list of all 55 Dividend Kings here.
We have compiled a comprehensive list of all 55 Dividend Kings, including key financial metrics such as price-to-earnings ratios and dividend yields. You can access the spreadsheet by clicking on the link below:
Increasing dividends for five decades is no easy task. A company must possess durable competitive advantages and an ability to outlast recessions. This explains why there are relatively few stocks that qualify as Dividend Kings.
One of them is home improvement retailer Lowe’s Companies (LOW), a Dividend King that has declared a cash dividend every quarter since its initial public offering in 1961.
Business Overview
Lowe’s traces its roots back to 1921 when LS Lowe founded a hardware store in North Wilkesboro, North Carolina. The company remained a single-store operation until 1949, when a second store was opened in Sparta, North Carolina. Since then, Lowe’s has grown to more than 2,200 stores in the US and Canada.
The company generates approximately $84 billion in annual revenue, with its 300,000 employees serving around 18 million customers each week.
Lowe’s has made its mark in the US with its 1,800+ stores by focusing on merchandising excellence, supply chain efficiency, operational efficiency, and customer engagement. However, Lowe’s fell behind rival Home Depot (HD) in recent years as Home Depot focused on professional customers, expanded its digital capabilities, and intensified its focus on the customer experience.
Lowe’s, for its part, has made necessary investments in recent years to close the gap.
It has also successfully translated this success into Canada, a feat that many retailers have attempted without success. The company sells under a handful of banners in Canada and has tapped into a $35 billion home improvement market.
We expect earnings per share of $12.25 for this year.
Source: Infographic
We expect Lowe’s to continue generating strong sales and earnings growth for many years, with blips expected during recessionary periods.
Growth Prospects
Lowe’s has kept its store base fairly constant in recent years, as it appears the company is happy with its current footprint. The number of markets Lowe’s can enter is somewhat limited by the massive size of the stores it operates, as small markets generally cannot support a Lowe’s store. However, despite this lack of footprint growth, Lowe’s has ample room for further earnings expansion.
One way Lowe’s expands its earnings is through strong comparable sales. The company has consistently achieved positive same-store sales growth each year for the past decade.
Lowe’s has grown through various economic situations and changes in consumer spending habits, and we think that will continue. That said, the potential for sales declines exists for short periods during recessions.
The second growth driver for Lowe’s is margin expansion. Gross margins tend not to move much in the home improvement business, and Lowe’s is no exception. However, SG&A costs have been leveraged down over time as revenue has increased, and as long as comparable sales continue to rise, this should remain a tailwind.
Third, Lowe’s spends freely on share repurchases. At its current rate, repurchases are expected to surpass $10 billion this year as well. We expect Lowe’s to continue buying back stock in the years ahead, as the company has ample cash on hand and strong earnings to support this strategy.
These factors are expected to drive Lowe’s annual earnings per share to grow by 9.0% over the next five years.
Competitive Advantages and Recession Performance
Lowe’s main competitive advantage is one it shares with Home Depot: its size and scale afford it superior buying power over smaller rivals. Lowe’s and Home Depot operate a near duopoly in the US; thus, Lowe’s is competitively positioned by virtue of its scale.
Apart from that, Lowe’s has focused its energy in recent years on building a more durable and less cyclical customer base. Pro customers account for about one-quarter of revenue, and Lowe’s has aggressively pursued those customers to try to take share from Home Depot.
Pro customers tend to spend heavily throughout the year as they complete customer jobs and are, therefore, quite lucrative. Lowe’s continues to build digital tools and pro-only shopping experiences to lure this customer away from its main rival.
Lowe’s tends to be somewhat cyclical, given that recessions generally result in lower discretionary spending and lower rates of construction. This recession is proving to be a boom for Lowe’s as consumers spend more time in their homes than ever and, therefore, are spending to improve them.
We view the next recession as potentially more severe for Lowe’s if it is accompanied by a slowdown in housing and commercial construction, which are significant drivers of revenue for Lowe’s.
Valuation and Expected Returns
We expect Lowe’s to produce $12.25 in earnings per share this year, so at the current price, Lowe’s stock trades at 18 times earnings. That is lower than our estimate of fair value, which stands at 20 times the current price. We therefore anticipate a 2.1% tailwind from valuation annually for the next five years.
The dividend yield is 2.2%, which is in the mid-range it has consistently occupied in recent years. This is attributable to the substantial increase in share price.
The yield, combined with an estimated 9% earnings-per-share growth and a tailwind from valuation, is expected to produce annual returns of around 13% over the next five years.
Final Thoughts
Lowe’s has an impressive track record of increasing its dividend each year, regardless of the state of the broader economy. Home improvement retail has continued to benefit from a strong housing market, although that tailwind has cooled recently, with interest rates spiking to decade-highs. Still, we view the company’s growth outlook as robust, driven in no small part by its substantial share repurchase program, while the valuation appears fair.
Lowe’s is not the cheapest stock around, but it is not unusual for the best businesses to command a higher valuation multiple. We view Lowe’s as a Buy today due to its world-class dividend history, attractive valuation, and 13% earnings growth projection.
Additional Reading
The following databases of stocks contain stocks with very long dividend or corporate histories, ripe for selection for dividend growth investors.
- The Dividend Aristocrats List: S&P 500 stocks with 25+ years of dividend increases.
- The High Yield Dividend Aristocrats List is comprised of the 20 Dividend Aristocrats with the highest current yields.
- The Dividend Achievers List is comprised of ~350 stocks with 10+ years of consecutive dividend increases.
- The High Yield Dividend Kings List is comprised of the 20 Dividend Kings with the highest current yields.
- The Blue Chip Stocks List: stocks that qualify as Dividend Achievers, Dividend Aristocrats, and/or Dividend Kings
- The High Dividend Stocks List: stocks that appeal to investors interested in the highest yields of 5% or more.
- The Monthly Dividend Stocks List: stocks that pay dividends every month, for 12 dividend payments per year.
- The Dividend Champions List: stocks that have increased their dividends for 25+ consecutive years.
Note: Not all Dividend Champions are Dividend Aristocrats because Dividend Aristocrats have additional requirements like being in The S&P 500. - The Dividend Contenders List: 10-24 consecutive years of dividend increases.
- The Dividend Challengers List: 5-9 consecutive years of dividend increases.
- The Best DRIP Stocks: The top 15 Dividend Aristocrats with no-fee dividend reinvestment plans.
- The High ROIC Stocks List: The top 10 stocks with high returns on invested capital.
- The High Beta Stocks List: The 100 stocks in the S&P 500 Index with the highest beta.
- The Low Beta Stocks List: The 100 stocks in the S&P 500 Index with the lowest beta.
- The Complete List of Russell 2000 Stocks
- The Complete List of NASDAQ-100 Stocks