Constructing Profits

If you’re looking for a strong, sustainable dividend-paying stock that will keep the payout checks coming for the next few decades, you can’t do much better than Lowe’s (NYSE: LOW).

The home-improvement retail chain has increased its dividend payouts without fail in each of the last 54 years. Lowe’s annual payouts have more than doubled over the last four years and recently yielded 2.1 percent. The best part? Lowe’s is likely to keep the dividend growth flowing for many years.

This stock has ridden the housing recovery wave to heights unimaginable in the depths of the Great Recession. Despite a recent decline, shares have roughly tripled in value, overall, over the past five years.

Lowe’s relatively simple retail business is likely to stay relevant as long as people need houses to live in and maintain. Better still, unlike many others retailers, its business appears to be Amazon-resistant.

While Home Depot has focused on serving building contractors and professionals, Lowe’s has more aggressively courted homeowners. In the robust housing market we’ve enjoyed, that has put Home Depot ahead, but Lowe’s is looking to remedy that shortfall, in part by buying some wholesale retailers. With housing prices and mortgage rates rising, fewer people might want to buy and more might want to repair and renovate — which could serve Lowe’s well. (The Motley Fool has recommended Lowe’s and Home Depot.)