Walmart Offers 44 Years of Rising Dividend Distributions (NYSE:WMT)
By: Ned Piplovic,
Walmart, Inc. (NYSE: WMT) continues to reward its shareholders with long-term asset appreciation and a rising dividend distribution, which the company has boosted every year since first declaring a $0.05 dividend in March 1974.
The retail giant’s 44-year record of consecutive annual rising dividend payouts makes the company a member of the exclusive Dividend Aristocrats club. In addition to boosting its annual dividend for at least 25 consecutive years, the companies that attain the Dividend Aristocrats status must be components of the S&P 500 Index with a minimum market capitalization of $3 billion. Currently only 53 companies meet all the criteria to qualify as a Dividend Aristocrat for 2018.
While the company’s share price pulled back since reaching above $100 in late January 2018, it did so after spiking to its all-time high and the pullback puts the share price growth trajectory back in line with its long-term growth trend that began in late 2015. While competition from Amazon (NASDAQ:AMZN) over the past year certainly stiffened the headwinds facing Walmart’s profit margins, share price and overall operation, the company continues to evolve in the fight to regain and potentially extend its market share.
To improve its e-commerce and compete directly with Amazon, Walmart acquired the e-commerce company jet.com in 2016, as well as the Moosejaw and Bonobos apparel companies with strong online presence in 2017. In addition, Walmart is reportedly working on a video streaming service that will operate as a separate business unit from the VUDU video services that the company acquired in 2010. Furthermore, in March 2018, the company started offering its own brand of meal kits with a price point target below the current kits offered by Blue Apron (NYSE:APRN)
Investors convinced that these new initiatives could be effective and profitable should do their research and take a position prior to the company’s next ex-dividend date on August 9, 2018, to ensure eligibility for the next round of dividend distributions on the September 4, 2018 pay date.
Walmart, Inc. (NYSE:WMT)
Based in Bentonville, Arkansas and founded in 1945, Walmart Inc. engages in the retail and wholesale segments in various formats worldwide. The company operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The company officially changed its name in February 2018 from Wal-Mart Stores, Inc. to Walmart Inc. Through its nearly 12,000 stores of various forms and e-commerce sites under 65 banners in 28 countries, the company offers a variety of grocery products, consumable goods, electronics, photo processing services, stationery, automotive, hardware and paint, sporting goods, outdoor living and horticulture. Additionally, the company also offers apparel, shoes, jewelry, home furnishings, housewares, small appliances, toys, crafts and seasonal merchandise. In addition to the merchandise, the company offers fuel and auto-repair services, as well as financial services and related products, including money orders, prepaid cards, fund wiring, money transfers, check cashing and consumer credit services. As of June 2018, the company had approximately 2.3 million employees globally, of which more than 65%, or 1.5 million, work in the United States.
At the beginning of the trialing 12 months, Walmart’s share price declined 2.5% and hit its 52-week low of $78.03. After that brief pullback, the company’s share price soared more than 40% before peaking at its all-time high of $109.55 on January 29, 2018. However, the share retreated almost 20% from the January peak to close on July 30, 2018 at $88.88, which was more in line with the share price’s long-term trends. While down versus the January peak, the July 30, 2018 closing price was still 11% higher than one year earlier and almost 14% above the August 2017 low.
The company‘s current $0.52 dividend is 2% higher than the $0.51 payout from the same period last year. This current quarterly dividend payout corresponds to a $2.08 annualized distribution and currently yields 2.3% which is 10% below the company’s 2.6% average dividend yield over the past five years. Still, the company’s current yield is more than double the $1.12 average yield of the Discount & Variety Stores industry segment as well as more than 20% above the average yield of the overall Services sector.
While having advanced its annual dividend payouts for more than four decades, in the two most recent decades Walmart enhanced its total annual payout more than 13-fold, at an average rising dividend growth rate of almost 14% per year. The combination of rising dividend and share price growth provided shareholders with a total return of 14.4% over the past 12 months.
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Ned Piplovic is the assistant editor of website content at Eagle Financial Publications. He graduated from Columbia University with a Bachelor’s degree in Economics and Philosophy. Prior to joining Eagle, Ned spent 15 years in corporate operations and financial management. Ned writes for www.DividendInvestor.com and www.StockInvestor.com.