With shares of Lowe’s Companies (NYSE:LOW) trading at around $35.20 is LOW an OUTPERFORM, WAIT AND SEE, or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:
C = Catalyst for the Stock’s Movement
Lowe’s released important information today. Earnings and revenue forecasts for 2012 have been maintained, higher gross margins and improved inventory productivity are expected, and there will be an aim for value improvement and product differentiation. Lowe’s also expects to have significant cash flow for the foreseeable future. The majority of this cash will be put toward the core business, serving developing home markets, and returning capital to shareholders.
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In addition to the information above, Lowe’s expects a 2% increase in overall sales and a 1% sales increase in comparable stores. 10 new store openings are estimated.
At the current time, Lowe’s offers a 1.80% yield, which is exactly the same as competitor, The Home Depot (NYSE:HD). Many numbers between these two companies are identical, or at least close to identical. However, there is one number that separates these companies from an investing standpoint, which we will cover further below.