Critical Comparison: Lumber Liquidators Holdings (NYSE:LL) versus Lowe’s Companies (LOW)

Lowe’s Companies (NYSE: LOW) and Lumber Liquidators Holdings (NYSE:LL) are both retail/wholesale companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitabiliy, institutional ownership, valuation, analyst recommendations, dividends, earnings and risk.

Profitability

This table compares Lowe’s Companies and Lumber Liquidators Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lowe’s Companies 4.22% 56.78% 10.14%
Lumber Liquidators Holdings -6.41% -18.93% -8.76%

Dividends

Lowe’s Companies pays an annual dividend of $1.64 per share and has a dividend yield of 2.1%. Lumber Liquidators Holdings does not pay a dividend. Lowe’s Companies pays out 51.6% of its earnings in the form of a dividend. Lumber Liquidators Holdings has increased its dividend for 54 consecutive years.

Earnings & Valuation

This table compares Lowe’s Companies and Lumber Liquidators Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Lowe’s Companies $66.64 billion 0.97 $7.51 billion $3.18 24.05
Lumber Liquidators Holdings $975.46 million 0.74 -$37.56 million ($2.26) -11.32

Lowe’s Companies has higher revenue and earnings than Lumber Liquidators Holdings. Lumber Liquidators Holdings 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.

Risk & Volatility

Lowe’s Companies has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Lumber Liquidators Holdings has a beta of 2.21, indicating that its stock price is 121% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Lowe’s Companies and Lumber Liquidators Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lowe’s Companies 1 9 14 0 2.54
Lumber Liquidators Holdings 0 6 4 0 2.40

Lowe’s Companies currently has a consensus price target of $85.58, indicating a potential upside of 11.89%. Lumber Liquidators Holdings has a consensus price target of $18.14, indicating a potential downside of 29.07%. Given Lowe’s Companies’ stronger consensus rating and higher probable upside, equities analysts clearly believe Lowe’s Companies is more favorable than Lumber Liquidators Holdings.

Insider & Institutional Ownership

74.7% of Lowe’s Companies shares are held by institutional investors. Comparatively, 74.8% of Lumber Liquidators Holdings shares are held by institutional investors. 0.1% of Lowe’s Companies shares are held by company insiders. Comparatively, 4.0% of Lumber Liquidators Holdings shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Lowe’s Companies beats Lumber Liquidators Holdings on 11 of the 16 factors compared between the two stocks.

About Lowe’s Companies

Lowe’s Companies, Inc. (Lowe’s) is a home improvement retailer. The Company operates approximately 1,860 home improvement and hardware stores, representing approximately 200 million square feet of retail selling space. The Company operates approximately 1,800 stores located across over 50 states in the United States, including approximately 80 Orchard Supply Hardware (Orchard) stores in California and Oregon, as well as approximately 40 stores in Canada and over 10 stores in Mexico. The Company operates through the home improvement retail operations segment. The Company offers a range of products for maintenance, repair, remodeling and decorating. The Company offers home improvement products in categories, including Lumber and Building Materials; Tools and Hardware; Appliances; Fashion Fixtures; Rough Plumbing and Electrical; Lawn and Garden; Seasonal Living; Paint; Flooring; Millwork; Kitchens; Outdoor Power Equipment, and Home Fashions.

About Lumber Liquidators Holdings

Lumber Liquidators Holdings, Inc. is a multi-channel specialty retailer of hardwood flooring, and hardwood flooring enhancements and accessories. The Company offers hardwood species, engineered hardwood, laminate and resilient vinyl flooring direct to the consumer. Its product categories include Solid and Engineered Hardwood; Laminate; Bamboo, Cork, Vinyl Plank and Other, Moldings and Accessories, and Non-Merchandise Services. It features the renewable flooring products, bamboo and cork, and provides a selection of flooring enhancements and accessories, including moldings, noise-reducing underlay, adhesives and flooring tools. It operates in a holding company structure with Lumber Liquidators Holdings, Inc. serving as its parent company and certain direct and indirect subsidiaries, including Lumber Liquidators, Inc., Lumber Liquidators Services, LLC, Lumber Liquidators Production, LLC, and Lumber Liquidators Canada ULC, conducting its operations.

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