Lowe’s Raises Its Quarterly Dividend 4% Even as Free Cash Flow Missed Estimates by 94%

Key Takeaways for Lowe’s Stock’s Dividend as of July 2026

• A 94% miss on free cash flow in the same quarter Lowe’s raised its dividend didn’t stop the company from beating consensus on EBIT and adjusted EPS in every one of the last five reporting periods.
• Raised to $1.20 per share in the quarter ended October 2025, the quarterly dividend now sits 4% above its prior $1.15 level.
• With $4.75 in trailing dividends against $12.40 in adjusted earnings, the payout ratio holds at 38%, well below levels that would squeeze future raises.
• TIKR values Lowe’s stock at $326 by January 2031, a 47% return.

A company can beat EBIT and EPS for five straight quarters and still miss free cash flow by 94% the same quarter it raises its dividend. See Lowe’s cash trend on TIKR for free →

Lowe’s Stock’s Earnings Keep Beating Estimates While Free Cash Flow Keeps Missing Them

Lowe’s (LOW) posted adjusted EPS of $3.03 for the quarter ended May 1, 2026, beating the Street’s $2.97 estimate by 2%. That beat extends a run: EBIT, EBITDA, net income and adjusted EPS have all topped consensus in every one of the last five reporting periods, with EBIT beats ranging from 1% to 2%.

But the accrual beats haven’t carried through to cash. Free cash flow missed the average estimate by 94% in the quarter ended October 31, 2025, the same quarter the board lifted the quarterly payout to $1.20 a share.

Cash from operations followed the same pattern, missing estimates by 78% and 68% across the two quarters bracketing the raise. The shortfall wasn’t permanent: FCF landed almost exactly on estimate in the most recent print, off by less than a tenth of a percent.

The gap matters because a dividend is paid from cash, not from the adjusted earnings line that keeps beating estimates.

Revenue tells a different story. Total sales grew 10% year over year in the most recent quarter, a sharp turn from the four straight quarters of decline that preceded it.

Operating margin didn’t follow the same trajectory. Cost of goods sold grew 12% year over year against 10% revenue growth, and operating expenses grew 11%, pulling operating margin down to 11% from 12% a year earlier.

That combination, faster growth funded by thinner margins and a stretch of missed cash flow around the raise, is the backdrop the payout increase now has to hold up against as forward estimates call for continued increases.

Beating EBIT and EPS estimates is one thing. Converting that into cash is another, and Lowe’s cash flow has been inconsistent lately. See Lowe’s cash flow history on TIKR for free →

Lowe’s Stock’s Payout Ratio Still Leaves Room to Keep Raising the Dividend

Lowe’s raised its quarterly dividend to $1.20 per share in the quarter ended October 2025, a 4% step up from the prior $1.15 payout.

Meanwhile, Lowe’s forward dividend yield climbed from 1.8% in January 2026 to 2.2% by July, a move driven as much by the stock’s pullback from its 52-week high as by the raise itself.

On the other hand, analysts’ estimates carries the quarterly dividend to $1.21 by July 2026 and $1.24 by October 2026, a path that works out to a 4% compound annual growth rate through July 2027.

Whether that pace holds depends on cash conversion normalizing the way it did last quarter, not repeating the swings that preceded it.

TIKR’s $326 Target on Lowe’s Stock Holds if Cash Conversion Keeps Recovering

TIKR’s mid-case model values Lowe’s stock at $326 by January 2031, a 47% total return from the current price of $222, or 9% annualized over 4.6 years.

A high-single-digit annualized return on a stock that’s also raising its dividend puts Lowe’s stock closer to a total-return holding than a pure income play.

The case for reaching that target rests on cash conversion normalizing, not on revenue growth alone. Margins already compressed even as sales reaccelerated last quarter, so profitability has to catch up to the top line for the target to hold.

TIKR’s 47% total return case for Lowe’s stock by 2031 depends on cash flow normalizing further. Test the assumptions yourself on TIKR for free →

Should You Invest in Lowe’s Companies, Inc.?

The only way to really know is to look at the numbers yourself. TIKR gives you free access to the same institutional-quality financial data that professional analysts use to answer exactly that question.

Pull up Lowe’s Companies, Inc. stock and you’ll see years of historical financials, what Wall Street analysts expect for revenue and earnings in the quarters ahead, how valuation multiples have moved over time, and whether price targets are trending up or down.

You can build a free watchlist to track Lowe’s Companies, Inc. alongside every other stock on your radar. No credit card required. Just the data you need to decide for yourself.

Access Professional Tools to Analyze LOW stock on TIKR for Free →