Lowe’s Companies (NYSE:LOW – Get Free Report) and Fortune Brands Innovations (NYSE:FBIN – Get Free Report) are both retail/wholesale companies, but which is the better stock? We will compare the two businesses based on the strength of their risk, earnings, valuation, profitability, dividends, institutional ownership and analyst recommendations.
Valuation and Earnings
This table compares Lowe’s Companies and Fortune Brands Innovations”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Lowe’s Companies | $83.67 billion | 1.61 | $6.96 billion | $12.07 | 19.89 |
| Fortune Brands Innovations | $4.61 billion | 1.44 | $471.90 million | $3.18 | 17.33 |
Profitability
This table compares Lowe’s Companies and Fortune Brands Innovations’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Lowe’s Companies | 8.22% | -49.12% | 15.07% |
| Fortune Brands Innovations | 8.75% | 19.85% | 7.13% |
Dividends
Lowe’s Companies pays an annual dividend of $4.80 per share and has a dividend yield of 2.0%. Fortune Brands Innovations pays an annual dividend of $1.00 per share and has a dividend yield of 1.8%. Lowe’s Companies pays out 39.8% of its earnings in the form of a dividend. Fortune Brands Innovations pays out 31.4% 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 53 consecutive years and Fortune Brands Innovations has increased its dividend for 2 consecutive years. Lowe’s Companies is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
74.1% of Lowe’s Companies shares are held by institutional investors. Comparatively, 87.6% of Fortune Brands Innovations shares are held by institutional investors. 0.3% of Lowe’s Companies shares are held by insiders. Comparatively, 1.0% of Fortune Brands Innovations shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of recent ratings and price targets for Lowe’s Companies and Fortune Brands Innovations, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Lowe’s Companies | 1 | 9 | 16 | 0 | 2.58 |
| Fortune Brands Innovations | 0 | 5 | 6 | 0 | 2.55 |
Lowe’s Companies currently has a consensus target price of $270.68, suggesting a potential upside of 12.76%. Fortune Brands Innovations has a consensus target price of $75.9091, suggesting a potential upside of 37.74%. Given Fortune Brands Innovations’ higher probable upside, analysts plainly believe Fortune Brands Innovations is more favorable than Lowe’s Companies.
Volatility & Risk
Lowe’s Companies has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500. Comparatively, Fortune Brands Innovations has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500.
Summary
Lowe’s Companies beats Fortune Brands Innovations on 10 of the 17 factors compared between the two stocks.
About Lowe’s Companies
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, décor, 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, renters, businesses, and government. 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 Fortune Brands Innovations
Fortune Brands Innovations, Inc. provides home and security products for residential home repair, remodeling, new construction, and security applications in the United States and internationally. The company operates through three segments: Water, Outdoors, and Security. The Water segment manufactures or assembles, and sells faucets, accessories, kitchen sinks, and waste disposals under the Moen, ROHL, Riobel, Victoria+Albert, Perrin & Rowe, Aqualisa, Shaws, Emtek, and Schaub brands. The Outdoors segment manufactures and sells fiberglass and steel entry door systems under the Therma-Tru brand; storm, screen, and security doors under the Larson brand; composite decking, railing, and cladding under the Fiberon brand; and urethane millwork under the Fypon brand. The Security segment manufactures, sources, and distributes locks, safety and security devices, and electronic security products under the Master Lock, American Lock, Yale, and August brands; and fire-resistant safes, security containers, and commercial cabinets under the SentrySafe brand. The company sells its products through various sales channels, including kitchen and bath dealers, wholesalers oriented toward builders or professional remodelers, industrial and locksmith distributors, do-it-yourself remodeling-oriented home centers, showrooms, e-commerce, and other retail outlets. Fortune Brands Innovations, Inc. was incorporated in 1988 and is headquartered in Deerfield, Illinois.
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