Don't Let The Name Fool You – Lowe's (LOW) Is A Highly Reliable Dividend King Stock

Reliability is a key metric in assessing any passive income investment. This explains why everyone from fund managers to independent passive income investors has Dividend King stocks in their portfolios. In addition to earning income and hedging against inflation, Dividend King stocks allow investors to diversify into higher-risk offerings that can quickly grow portfolio profits. Keep reading to discover why Lowe's is a Dividend King that can be a foundational piece in your portfolio.

LOWE'S Companies (NYSE: LOW) is one of America's largest hardware and home improvement stores. Lowe's company bio shows the company began in 1921 when JS Lowe opened a hardware and general store in North Wilkesboro, North Carolina. After JS Lowe's death, the company grew steadily under the leadership of JS Lowe's son, Jim and Jim's brother-in-law, Carl Buchan.

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Buchan led Lowe's pivot from a general store to its current incarnation as a home-improvement and hardware outlet after WWII. According to public filings, Lowe's became publicly traded in 1961. At IPO, the company sold approximately 400,000 shares for $12.25 each. Today, Lowe's stock is trading at $244.52, meaning IPO investors who held on saw significant returns. However, Lowe's strong share growth only tells part of the story. 

The company's history of paying dividends is almost as impressive as its share growth. Public filings and SureDividend indicate Lowe's paid its first dividend in 1963 and has increased shareholder dividends for 60 consecutive years. To put that streak into perspective, the iconic Ford Mustang debuted in 1964. This might explain why 60 hedge funds (per Insider Monkey) are invested in Lowe's.

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Benzinga estimates Lowe's current market cap to be $141.7 billion and its current dividend yield to be 1.84%. Based on its current share price of $244.52, Lowe's stockholders will earn approximately $4.49 per share. However, there may be an increase in both share price and dividend yield on the horizon. JP Morgan analysts expect Lowe's stock to benefit from lower borrowing costs and a rebounding housing market in 2025.

Benzinga's surveyed  28 analysts and their consensus target for Lowes is  $280.11. However, RBC Capital, Truist Securities and Bernstein analysts have set more bullish targets ranging between $292 and $304. If Lowe's hits any of those targets, there will likely be an increased dividend payout. That means in addition to reliability, Lowe's may offer significant upside for passive income and growth investors in 2025.

The upside plus Lowe's long history of paying dividends makes this stock a potential winner in any portfolio. Even if the share price doesn't hit the $300 mark in 2025, a bump from $244.52 into the $280 range would represent a solid win. The name might be Lowe's, but it could be a high performer for buy and hold passive income investors.

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