LOW vs ROST: Dividend Comparison
Dividend data as of
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.
Verdict
Yield Analysis
LOW yields 0.83% more than ROST. In dollar terms, LOW pays $4.70/share vs ROST's $1.62/share annually.
Dividend Growth
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: The payout ratio of 39% is well within sustainable levels, leaving room for future increases. Earnings cover the dividend 2.6x.
ROST: The payout ratio of 25% is well within sustainable levels, leaving room for future increases.
Estimated Annual Dividend Income
Based on current dividend yields. Actual income may vary.
What does $10,000 buy in LOW vs ROST today?
At $286.71 per share, $10,000 buys about 34.9 shares of Lowes Companies Inc (LOW). Each share pays $4.70 per year in dividends, so the position starts out generating roughly $164 per year — about $14 a month.
At $196.40 per share, $10,000 buys about 50.9 shares of Ross Stores, Inc. (ROST). Each share pays $1.62 per year in dividends, so the position starts out generating roughly $82 per year — about $7 a month.
LOW is the larger income stream from day one: $81 per year more on the same $10,000 invested.
Why is there no dividend growth comparison for ROST?
REWD's dividend database has no five-year growth rate for Ross Stores, Inc. (ROST) — most often because the dividend history is too short to compute one, which is common for companies that began paying dividends only in the past few years.
What the data does show for ROST: a 0.82% current yield and a 25% payout ratio, which leaves ample room to raise the payout from here. Until a multi-year raise history exists, treat any growth assumption for ROST as a guess rather than a trend.
Lowes Companies Inc (LOW) is the one with a measurable track record here — dividend raises of about 20.9% a year over the past five years. If a proven raise history matters to you, LOW wins that dimension by default until ROST builds one.
Can LOW and ROST afford their dividends?
Lowes Companies Inc (LOW) earns $12.07 per share against $4.70 paid out in dividends — 2.6x coverage (a 39% payout ratio).
Ross Stores, Inc. (ROST) pays out about 25% of its earnings as dividends, which implies roughly 4.0x earnings coverage.
ROST's wider coverage leaves more cushion if earnings dip. As a rule of thumb, coverage below about 1.5x (a payout ratio above ~65%) is where a dividend starts to look stretched — worth watching for LOW if earnings weaken.
Which fits an early-retirement income portfolio better, LOW or ROST?
For income you need right now, Lowes Companies Inc (LOW) leads: $100,000 invested today pays about $138 a month at the current 1.65% yield, versus $69 a month from Ross Stores, Inc. (ROST) at 0.82%.
Many income investors simply hold both — the mix pairs current yield with growth and spreads single-name risk. Whichever way you lean, dividends are never guaranteed; recheck the payout each quarter rather than setting and forgetting.
$10,000 with DRIP: projected annual income
If each holding keeps raising its dividend at its real 5-year rate and every payment is reinvested, a $10,000 position pays $1,298/yr in LOW vs $89/yr in ROST by year 10.
Assumes dividends are reinvested at the current yield and grow at each holding's trailing 5-year dividend CAGR (0% where growth history is unavailable). A projection, not a prediction — no price appreciation modeled.
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