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Lowe's Expected to Hike Dividend Next Week -- Barron's Blog
DOW JONES & COMPANY, INC. 1:37 PM ET 5/23/2017
Symbol Last Price Change
LOW 83.055 -0.995 (-1.18%)
QUOTES AS OF 01:49:49 PM ET 05/23/2017
Shares in Lowe's(LOW) were falling Tuesday, a day before its first quarter earnings release. As of 1 p.m. ET, the home improvement chain's shares were down 79 cents, or 1%, to $83.28, even though the earnings are expected to be good.

Plus, there may be more positive news for investors in the form of a big dividend increase just around the corner.

Research firm IHS Markit issued a report Tuesday predicting that Lowe's(LOW) will hike its dividend 17% next week to 41 cents a share, which would keep it at the 35% payout ratio it has maintained for the last five years.

Lowe's (LOW) current quarterly dividend is 35 cents a share for a yield of 1.68%. A bump up to 41 cents a quarter would take the yield to just under 2% if the share price stayed around the same level.

Analyst Kun Pu writes:

We believe as a market leader, LOW is well positioned to benefit from the robust home improvement industry as national job gains and income growths continue. The company is currently guiding a modest 5% growth in total sales, an EPS of approximately $4.64 (+16% yoy) and free cash flow of $4.5bn (flat yoy) for fiscal year ending in 2018. Our estimated dividend distribution would cost roughly $1.3bn if considering management proposed share repurchase, which we believe LOW could easily afford.

More at Barron's Income Investing blog, http://www.barrons.com/income-investing