Financial Survey: Lowe’s Companies (NYSE:LOW) vs. Wesfarmers (OTCMKTS:WFAFY)

Lowe’s Companies (NYSE:LOWGet Free Report) and Wesfarmers (OTCMKTS:WFAFYGet Free Report) are both retail/wholesale companies, but which is the superior investment? We will compare the two companies based on the strength of their earnings, profitability, dividends, analyst recommendations, valuation, institutional ownership and risk.

Valuation and Earnings

This table compares Lowe’s Companies and Wesfarmers’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lowe’s Companies $97.06 billion 1.20 $6.44 billion $10.16 19.91
Wesfarmers N/A N/A N/A $1.19 14.69

Lowe’s Companies has higher revenue and earnings than Wesfarmers. Wesfarmers is trading at a lower price-to-earnings ratio than Lowe’s Companies, indicating that it is currently the more affordable of the two stocks.

Dividends

Lowe’s Companies pays an annual dividend of $4.40 per share and has a dividend yield of 2.2%. Wesfarmers pays an annual dividend of $0.44 per share and has a dividend yield of 2.5%. Lowe’s Companies pays out 43.3% of its earnings in the form of a dividend. Wesfarmers pays out 37.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Lowe’s Companies has increased its dividend for 51 consecutive years. Wesfarmers is clearly the better dividend stock, given its higher yield and lower payout ratio.

Analyst Ratings

This is a summary of recent ratings and price targets for Lowe’s Companies and Wesfarmers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lowe’s Companies 0 12 12 0 2.50
Wesfarmers 0 1 0 0 2.00

Lowe’s Companies currently has a consensus target price of $242.32, suggesting a potential upside of 19.82%. Given Lowe’s Companies’ stronger consensus rating and higher possible upside, equities analysts clearly believe Lowe’s Companies is more favorable than Wesfarmers.

Institutional & Insider Ownership

71.9% of Lowe’s Companies shares are owned by institutional investors. Comparatively, 0.0% of Wesfarmers shares are owned by institutional investors. 0.2% of Lowe’s Companies shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Lowe’s Companies and Wesfarmers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lowe’s Companies 6.48% -58.56% 18.29%
Wesfarmers N/A N/A N/A

Summary

Lowe’s Companies beats Wesfarmers on 11 of the 14 factors compared between the two stocks.

About Lowe’s Companies

(Get Free Report)

Lowe's Companies, Inc., together with its subsidiaries, operates as a home improvement retailer in the United States. The company offers a line of products for construction, maintenance, repair, remodeling, and decorating. It also provides home improvement products, such as appliances, seasonal and outdoor living, lawn and garden, lumber, kitchens and bath, tools, paint, millwork, hardware, flooring, rough plumbing, building materials, d├ęcor, and electrical. In addition, the company offers installation services through independent contractors in various product categories; and extended protection plans and repair services. It sells its national brand-name merchandise and private brand products to professional customers, homeowners, and renters. The company also sells its products through Lowes.com website; and through mobile applications. Lowe's Companies, Inc. was founded in 1921 and is based in Mooresville, North Carolina.

About Wesfarmers

(Get Free Report)

Wesfarmers Limited engages in the retail business in Australia, New Zealand, and internationally. The company is involved in the retail sale of building materials, home and garden improvement, lifestyle, and outdoor living products; apparel and general merchandise, including toys, leisure, entertainment, home, and consumables; and office products and solutions, such as stationery, technology, furniture, art supplies, and learning and development resources, as well as print and create, and technical support services through its Officeworks stores. It also provides hardware and software repairs, system security solutions, wireless and wired networking services, virus and spyware prevention and removal, and data backup and recovery solutions. In addition, the company manufactures and supplies ammonia, ammonium nitrate, and industrial chemicals; manufactures, imports, and distributes phosphate, nitrogen, and potassium-based fertilizers; supplies polyvinyl chloride resins; produces wood-plastic composite products; and manufactures and distributes sodium cyanide. Further, it produces and distributes liquefied petroleum gas and liquefied natural gas; supplies and distributes maintenance, repair, operating products, and industrial safety products and services; manufactures and markets industrial, medical, and specialty gases and equipment; supplies tools, safety gear, personal protective equipment, electricals, work wear, and industrial supplies; and provides risk management and compliance services, as well as footwear; safety products, uniforms, engineering supplies, and packaging services; and engages in other businesses. Additionally, the company provides health, beauty, and wellbeing products and services; clinical cosmetic and skin care treatments; retail support services; distributes pharmaceutical goods; and operates online marketplace and data sharing platform. Wesfarmers Limited was founded in 1914 and is headquartered in Perth, Australia.

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