Core Insights - Madison Large Cap Fund underperformed the S&P 500 Index, decreasing by 2.2% in Q3 2025 compared to an 8.1% gain for the index, primarily due to a market focus on short-term profits [1] - The fund's top five contributors included Lowe's Companies, Inc., which benefited from an improving U.S. housing market and announced the acquisition of Foundation Building Materials [3] Fund Performance - Madison Large Cap Fund's performance in Q3 2025 was significantly lower than the S&P 500 Index, indicating challenges in the current market environment [1] - The fund's focus on long-term investments may have contributed to its underperformance relative to the benchmark [1] Company Focus: Lowe's Companies, Inc. - Lowe's Companies, Inc. experienced a one-month return of -3.21% and a 52-week loss of 13.66%, with its stock closing at $233.03 on November 10, 2025, and a market capitalization of $130.689 billion [2] - The company was highlighted as a top contributor to the fund's performance, with improvements linked to a thawing U.S. housing market and growth opportunities from its acquisition of Foundation Building Materials [3] Hedge Fund Interest - Lowe's Companies, Inc. was held by 75 hedge fund portfolios at the end of Q2 2025, an increase from 68 in the previous quarter, indicating growing interest among institutional investors [4] - Despite this interest, the analysis suggests that certain AI stocks may offer greater upside potential compared to Lowe's [4]

Home Improvement Market Overview - The home improvement market is currently weak, with muted performance from Home Depot and Lowe's [2] - The market is lapping the hurricane benefit from the previous year, which was a 55 basis points tailwind for Home Depot and 100 basis points for Lowe's [2] - There is no significant optimism in the home improvement space currently, though rate cuts next year could potentially drive demand [3] Lowe's vs Home Depot - Bernstein prefers Lowe's over Home Depot in the medium term [4] - Lowe's is trading at a valuation discount to Home Depot [5] - Lowe's is more cyclical and expected to benefit more on the upside when the market rebounds [6] - Lowe's has more cost savings opportunities and the valuation gap provides more downside protection [6] Pro Customer & Acquisitions - Both Home Depot and Lowe's are entering the complex pro market, targeting bigger ticket pros [8] - Upcoming guidance from both companies will reflect recent acquisitions, which are likely to be margin dilutive in the near term [8] - Near-term weakness is expected in the broader pro market based on peer and supplier reporting [9] - The housing market, new construction market, and roofing market are not showing signs of recovery [9]

Core Insights - A combination of macroeconomic challenges is expected to lead to softer home improvement sales for the remainder of 2025, with the growth projection for the overall home improvement market reduced from 3.4% to 2.5% [1] Market Predictions - The consumer market sales prediction has been lowered to a 1.3% increase, down from 2.6% predicted in June 2025, while professional market sales are expected to increase by 4.6%, down from 4.9% [2] Economic Challenges - Key economic challenges include consumer price inflation expected to rise to the 3% range in late 2025, a 5.3% drop in housing starts in Q2 2025, and a 2.7% drop in home sales in June 2025, with mortgage rates hovering around 6.25% [3] Market Share of Major Retailers - Major home improvement retail chains dominate the industry, with Home Depot holding approximately 29% of the market, Lowe's capturing 17%, and Amazon attracting 11.9% according to Numerator's Home Improvement Tracker [4][8] Impact on Local Retailers - The dominance of major retailers has led to the permanent closure of many small, local hardware stores [5] Iconic Store Closures - Several iconic hardware stores have permanently closed, including Carnation Ace Hardware, Ritter's True Value Hardware, and Kreuger's True Value Hardware, with the latter planning to shut down after a liquidation sale due to lower demand [6][7] Additional Store Closures - Jerry's Hardware & Rental, part of the Do It Best retail cooperative, announced the closure of two stores in Minnesota by the end of 2025 [9]

Core Insights - Dividend stocks can significantly enhance long-term capital appreciation, with 85% of the S&P 500's cumulative total return from 1960 to 2023 attributed to reinvested dividends [1] Group 1: Importance of Quality in Dividend Stocks - Quality may be more important than yield when selecting dividend stocks, as high-yield stocks often come with increased risk [2] - Investors are encouraged to focus on stocks with a strong track record of earnings and dividend growth consistency rather than just high yields [2] Group 2: Recommended Dividend Stocks - Five high-quality dividend growth stocks recommended for long-term holding include Lowe's, NextEra Energy, Realty Income, Philip Morris International, and United Parcel Service [3] Group 3: Lowe's Companies - Lowe's has raised its dividend for 62 consecutive years, with a current forward dividend yield of 2% [4] - The quarterly payout has increased from $0.28 to $1.20 per share since 2015, representing over 15% annualized growth [6] - The current dividend payout ratio is around 38%, indicating potential for continued aggressive dividend increases [7] Group 4: NextEra Energy - NextEra Energy has raised its dividend for nearly 30 years, currently offering a 2.7% dividend yield [9] - The company's quarterly dividend has nearly tripled since 2015, despite a post-pandemic slump in renewable energy stocks [10] - A recent deal with Google to supply electricity for data centers may bolster long-term growth prospects [10] Group 5: Realty Income - Realty Income has achieved 112 consecutive quarterly dividend increases, equating to 28 years of growth [11] - The stock offers a forward dividend yield of 5.5% and pays dividends monthly, appealing to income-focused investors [12] - Since going public in 1994, Realty Income has generated compound annual total returns of 13.5% and annualized dividend growth of 4.2% [13] Group 6: Philip Morris International - Philip Morris is transitioning towards smoke-free products, which may enhance its future prospects [15] - The company has raised its dividend annually since its 2008 spinoff, currently offering a forward dividend yield of 3.8% [17] Group 7: United Parcel Service - UPS has a forward dividend yield of nearly 7%, but this may indicate dividend uncertainty [18] - The company has a long history of dividend increases, suggesting a commitment to maintaining its dividend growth track record [19] - Cost-saving measures through downsizing and automation could lead to $3.5 billion in annual savings, supporting future dividend security [20]

Core Insights - Lowe's has a target payout ratio of 35% and currently operates at approximately 38%, indicating potential for dividend growth aligned with net income increases [1][2] - The company has significantly outpaced inflation with its dividend growth, having more than quintupled the inflation rate since the pandemic [2] - Lowe's has maintained a streak of over 60 consecutive years of dividend increases, earning it the status of both Dividend Aristocrat and Dividend King [3][4] Dividend Growth and Strategy - Lowe's dividend growth has doubled since 2021, with a 4% increase planned for 2025, which still exceeds inflation [2][3] - The company has made strategic acquisitions, spending over $10 billion on Artisan Design Group and Foundation Building Materials to enhance its market position and product offerings [6] - Analysts project an 8% growth for Lowe's in the coming year, although they have historically underestimated the company's earnings growth [6] Market Position and Comparisons - Lowe's is part of a select group of companies known as Dividend Aristocrats, with fewer than 70 companies achieving this status [4][5] - The article highlights other companies with strong dividend growth, such as A. O. Smith and Automatic Data Processing, which also have impressive long-term dividend increase records [5][13] - A. O. Smith has increased its dividends by 1,600% since 2000, while Automatic Data Processing has raised its payouts by 2,100% in the same period [8][13] Financial Metrics - Lowe's current market capitalization is approximately $136 billion [3] - A. O. Smith has a payout ratio of 37%, lower than Lowe's, indicating potential for future dividend growth [8] - Automatic Data Processing has a higher payout ratio of 60%, but it has maintained a strong earnings growth rate of 9.8% [14]

Core Insights - Lowe's announced a $1 million donation to support hurricane recovery efforts in Jamaica following the devastation caused by Hurricane Melissa, a Category 5 hurricane [1][2] - The donation will be utilized for grants and product donations to nonprofit relief partners, emphasizing the company's commitment to community support during crises [1][2] - Lowe's associates have mobilized to deliver critical supplies, including generators and flood relief buckets, to meet urgent needs in Jamaica [2] Company Overview - Lowe's Companies, Inc. is a FORTUNE® 100 home improvement company with over 83 billion dollars in total sales for fiscal year 2024, serving approximately 16 million customer transactions weekly [4] - The company employs around 300,000 associates and operates more than 1,700 home improvement stores, 530 branches, and 130 distribution centers [4] - Lowe's focuses on creating safe, affordable housing, improving community spaces, developing skilled trade experts, and providing disaster relief [4]

Core Viewpoint - Lowe's Companies, Inc. is a leading American retail company focused on home improvement, maintenance, and decorating products and services, with a significant market presence [1] Company Overview - Lowe's operates in the home improvement sector, providing a wide range of products and services aimed at enhancing home maintenance and decoration [1] Market Position - The company is recognized as one of the few market leaders in its industry, indicating a strong competitive position [1]

Core Insights - Financial giants are showing a bearish sentiment towards Lowe's Companies, with 50% of traders indicating bearish tendencies and only 40% bullish [1] - The unusual options activity includes 7 put trades valued at $2,032,627 and 3 call trades valued at $101,083 [1] Projected Price Targets - Major market movers are focusing on a price range between $230.0 and $280.0 for Lowe's Companies over the last three months [2] Insights into Volume & Open Interest - Analyzing volume and open interest is crucial for tracking liquidity and interest in Lowe's options, particularly within the $230.0 to $280.0 strike price range over the past 30 days [3] Options Activity Snapshot - Significant options trades include bearish puts with a total trade price of $1.3 million at a strike price of $230.00, and several other notable trades at $237.50 and $250.00 [8] Company Overview - Lowe's is the second-largest home improvement retailer globally, operating approximately 1,750 stores in the US after divesting Canadian locations in 2023 [9] - The company primarily serves retail do-it-yourself customers, accounting for around 70% of sales, while professional business clients have increased to 30% from less than 20% over the past six years [10] Current Position of Lowe's Companies - Analysts have set a consensus target price for Lowe's Companies at $247.5, with one maintaining an In-Line rating and a target price of $250 [11][12] - The stock is currently trading at $242.07, reflecting a 1.5% increase in trading volume of 1,016,707 [14]

Performance Overview - The Dividend Kings experienced a decline of 1.58% in September, underperforming the SPDR S&P 500 ETF (SPY) by 4.47% [1] Current Month Performance - The performance in the current month is not showing improvement compared to previous results [1]

Core Insights - The Home Depot and Lowe's dominate the U.S. home improvement market, valued at over $500 billion, with significant shares in DIY, DIFM, and professional contractor segments [1][2]. Home Depot (HD) - Home Depot holds a leading position in the U.S. home improvement retail market, estimated to control nearly 50% of the $1 trillion industry, with 2,353 stores and a 12% year-over-year increase in online sales for Q2 fiscal 2025 [4][8]. - The company's competitive edge stems from its scale, supply-chain efficiency, and a diverse customer base, which includes both DIY homeowners and professional contractors [5]. - Strategic expansion into the Pro ecosystem through acquisitions like SRS and the pending GMS deal enhances its market reach and ability to cross-sell [6][7]. - Home Depot reported Q2 fiscal 2025 sales of $45.3 billion, a 4.9% increase year-over-year, with an adjusted operating margin of 14.8% and a return on invested capital of 27.2% [8]. Lowe's (LOW) - Lowe's is the second-largest home improvement retailer in North America, holding about 25% of the U.S. market, with Q2 fiscal 2025 sales of $24 billion, up 1.1% year-over-year [9][10]. - The company focuses on expanding its Pro and digital ecosystem, with an adjusted EPS of $4.33, reflecting a 5.6% increase, and an operating margin of 14.7% [9]. - Lowe's recent acquisition of Foundation Building Materials opens access to a $250 billion Pro market, enhancing its capabilities in drywall and insulation distribution [11]. - The company reported a return on invested capital of 29.5% and generated $3.7 billion in free cash flow during the fiscal second quarter, indicating strong financial health [12]. Market Comparison - Home Depot's stock has decreased by 2.5% over the past year, while Lowe's has seen a decline of 7.3%, with Home Depot outperforming due to its scale and Pro segment growth [17]. - Home Depot trades at a forward price-to-sales (P/S) multiple of 2.26, while Lowe's is at 1.55, indicating that Home Depot is priced at a premium [18]. - The Zacks Consensus Estimate for Home Depot's fiscal 2025 sales suggests a 2.9% growth, while Lowe's estimates indicate a 1.8% growth [13][16]. Investment Outlook - Home Depot is viewed as the stronger investment option due to its superior stock performance, robust growth outlook, and strategic expansions [21][22]. - Lowe's remains a strong competitor with solid operational discipline, but Home Depot's execution and innovation provide a competitive edge [22].