LOW vs ROST: Dividend Yield, Growth & Safety Comparison
Lowes Companies Inc (LOW) and Ross Stores, Inc. (ROST) are both in the Consumer Discretionary sector, making them natural rivals for dividend investors. LOW edges ahead on yield at 1.65% versus ROST's 0.82%. Both stocks carry a "Safe" dividend safety rating.
Key Metrics Comparison
| Metric | LOW | ROST |
|---|
| Dividend Yield | 1.65% | 0.82% |
| Annual Dividend | $4.70 | $1.62 |
| 5-Year CAGR | 20.9% | N/A |
| Payout Ratio | 39% | 25% |
| Consecutive Years | 0 | N/A |
| Price | $286.71 | $196.40 |
Yield Comparison
Lowes Companies Inc (LOW) currently yields 1.65%, which is modest for the broader market. That's 0.83% more than Ross Stores, Inc. (ROST), which yields 0.82%. In dollar terms, LOW pays $4.70/share annually versus ROST's $1.62/share.
Dividend Growth
LOW has a 5-year dividend CAGR of 20.9%. Growth data is not available for ROST. LOW: Dividend growth is slowing — the 3-year CAGR of 20.3% trails the 5-year rate of 20.9% and the 10-year rate of 19.0%.
Dividend Safety
LOW's dividend safety is rated "Safe." The payout ratio of 39% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.6x. ROST's dividend safety is rated "Safe." The payout ratio of 25% is well within sustainable levels, leaving room for future increases. ROST's payout ratio of 25% is more conservative than LOW's 39%, suggesting more room for future increases.
Income Comparison
A $10,000 investment in LOW generates approximately $165/year in dividend income, compared to $82/year from ROST — a difference of $83/year. At $100,000, that gap widens to $830/year.
Verdict
- Best for income: LOW
- Best for safety: ROST
Frequently Asked Questions
Which has a higher dividend yield, LOW or ROST?
Lowes Companies Inc (LOW) has a higher dividend yield of 1.65% compared to Ross Stores, Inc. (ROST) at 0.82%.
Which is safer for dividend income, LOW or ROST?
Lowes Companies Inc's dividend safety is rated "Safe" while Ross Stores, Inc. is rated "Safe." The payout ratio of 39% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.6x. The payout ratio of 25% is well within sustainable levels, leaving room for future increases.
How much income does $10,000 in LOW vs ROST generate?
A $10,000 investment in LOW generates approximately $165/year in dividends, while the same amount in ROST generates about $82/year.
Which has a lower payout ratio, LOW or ROST?
Ross Stores, Inc. has a lower payout ratio of 25% compared to Lowes Companies Inc's 39%. A lower payout ratio generally indicates more room for dividend growth and better sustainability.
LOW vs ROST: which is better for retirement income?
It depends on your priorities. LOW for current income, ROST for safety. Many retirement investors hold both for diversification.
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