Walgreens Boots Alliance (NASDAQ:WBA) and Lowe's Companies (NYSE:LOW) are both large-cap retail/wholesale companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.
Earnings and Valuation
This table compares Walgreens Boots Alliance and Lowe's Companies' gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Walgreens Boots Alliance | $136.87 billion | 0.25 | $3.98 billion | $5.99 | 6.70 |
| Lowe's Companies | $72.15 billion | 1.44 | $4.28 billion | $5.72 | 24.03 |
Lowe's Companies has lower revenue, but higher earnings than Walgreens Boots Alliance. Walgreens Boots Alliance is trading at a lower price-to-earnings ratio than Lowe's Companies, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Walgreens Boots Alliance and Lowe's Companies' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Walgreens Boots Alliance | 0.55% | 19.43% | 5.46% |
| Lowe's Companies | 6.17% | 220.44% | 11.68% |
Risk & Volatility
Walgreens Boots Alliance has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500. Comparatively, Lowe's Companies has a beta of 1.44, indicating that its stock price is 44% more volatile than the S&P 500.
Dividends
Walgreens Boots Alliance pays an annual dividend of $1.83 per share and has a dividend yield of 4.6%. Lowe's Companies pays an annual dividend of $2.20 per share and has a dividend yield of 1.6%. Walgreens Boots Alliance pays out 30.6% of its earnings in the form of a dividend. Lowe's Companies pays out 38.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Walgreens Boots Alliance has increased its dividend for 44 consecutive years and Lowe's Companies has increased its dividend for 57 consecutive years. Walgreens Boots Alliance is clearly the better dividend stock, given its higher yield and lower payout ratio.
Analyst Ratings
This is a summary of current ratings and price targets for Walgreens Boots Alliance and Lowe's Companies, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Walgreens Boots Alliance | 1 | 14 | 0 | 0 | 1.93 |
| Lowe's Companies | 0 | 2 | 28 | 0 | 2.93 |
Walgreens Boots Alliance currently has a consensus price target of $46.6429, suggesting a potential upside of 16.26%. Lowe's Companies has a consensus price target of $137.3214, suggesting a potential downside of 0.08%. Given Walgreens Boots Alliance's higher probable upside, analysts plainly believe Walgreens Boots Alliance is more favorable than Lowe's Companies.
Institutional & Insider Ownership
57.1% of Walgreens Boots Alliance shares are owned by institutional investors. Comparatively, 74.5% of Lowe's Companies shares are owned by institutional investors. 16.9% of Walgreens Boots Alliance shares are owned by company insiders. Comparatively, 0.1% of Lowe's Companies shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Summary
Lowe's Companies beats Walgreens Boots Alliance on 10 of the 17 factors compared between the two stocks.
