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Wal-Mart (WMT) Hikes Dividend, Boosts Shareholder Value
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Retail giant, Wal-Mart Stores Inc. (WMT - Free Report) has announced a 2% hike in its annual cash dividend to $2.04 per share. The fiscal year 2018 annual dividend is scheduled to be paid in four quarterly installments of 51 cents per share.
The new dividend will be paid on Apr 3, 2017, Jun 5, 2017, Sep 5, 2017 and Jan 2, 2018 to shareholders on record as of Mar 10, 2017, May 12, 2017, Aug 11, 2017 and Dec 8, 2017.
The annualized dividend now amounts to a dividend yield of 3.5%, based on Wal-Mart’s closing price of $71.45 as of Feb 21, 2017, marking the 44th consecutive year of dividend hike. The company previously increased annual dividend by 2% in Nov 11, 2016 to $2.00 per share from $1.96 per share.
Wal-Mart has a good track record of returning value to shareholders. In fiscal year 2017, Wal-Mart returned $14.5 billion to shareholders in the form of dividends and share repurchases.
The company paid $6.2 billion in dividends during the fiscal year. Moreover, the company repurchased about 120 million shares worth $8.3 billion in the fiscal year, with shares worth $9.2 billion remaining out of $20 billion authorized in Oct 2015.
Additionally, it ended the quarter with cash and cash equivalents of $6.9 billion, total long-term debt of $36.0 billion, long-term capital lease obligations of $6.0 billion and shareholders’ equity of $80.5 billion.
Wal-Mart’s shares have increased 8.9% in the past one year, little higher than the Zacks categorized Retail-Supermarkets industry’s growth of 4.1%.
Our Take
Despite the company’s efforts to boost sales and regain investors’ confidence, it still faces many headwinds, which are likely to impact earnings in the near term. Higher expenses, lower margins at Wal-Mart U.S. and currency headwinds are also expected to negatively impact the results.
Wal-Mart is also expanding in eCommerce business through acquisitions. Earlier in Feb 2017, Wal-Mart increased its stake in Chinese eCommerce website, JD.com Inc., to 12.1%, up from the 10.8% stake it had in Oct 2016, and its 5.9% stake in Jun 2016.
Zacks Rank and Key Picks
Wal-Mart currently carries a Zacks Rank #4 (Sell).
While Zumiez has an expected long-term earnings growth of 15.0%, Genesco and Dollar Tree has an expected earnings growth of 9.5% and 16.7% respectively, for the next three to five years.
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Wal-Mart (WMT) Hikes Dividend, Boosts Shareholder Value
Retail giant, Wal-Mart Stores Inc. (WMT - Free Report) has announced a 2% hike in its annual cash dividend to $2.04 per share. The fiscal year 2018 annual dividend is scheduled to be paid in four quarterly installments of 51 cents per share.
The new dividend will be paid on Apr 3, 2017, Jun 5, 2017, Sep 5, 2017 and Jan 2, 2018 to shareholders on record as of Mar 10, 2017, May 12, 2017, Aug 11, 2017 and Dec 8, 2017.
The annualized dividend now amounts to a dividend yield of 3.5%, based on Wal-Mart’s closing price of $71.45 as of Feb 21, 2017, marking the 44th consecutive year of dividend hike. The company previously increased annual dividend by 2% in Nov 11, 2016 to $2.00 per share from $1.96 per share.
Wal-Mart has a good track record of returning value to shareholders. In fiscal year 2017, Wal-Mart returned $14.5 billion to shareholders in the form of dividends and share repurchases.
The company paid $6.2 billion in dividends during the fiscal year. Moreover, the company repurchased about 120 million shares worth $8.3 billion in the fiscal year, with shares worth $9.2 billion remaining out of $20 billion authorized in Oct 2015.
Wal-Mart reported better-than-expected fiscal 2017 results, wherein both earnings and revenues exceeded the Zacks Consensus Estimate driven by higher comparable store sales.
Additionally, it ended the quarter with cash and cash equivalents of $6.9 billion, total long-term debt of $36.0 billion, long-term capital lease obligations of $6.0 billion and shareholders’ equity of $80.5 billion.
Wal-Mart’s shares have increased 8.9% in the past one year, little higher than the Zacks categorized Retail-Supermarkets industry’s growth of 4.1%.
Our Take
Despite the company’s efforts to boost sales and regain investors’ confidence, it still faces many headwinds, which are likely to impact earnings in the near term. Higher expenses, lower margins at Wal-Mart U.S. and currency headwinds are also expected to negatively impact the results.
Wal-Mart is also expanding in eCommerce business through acquisitions. Earlier in Feb 2017, Wal-Mart increased its stake in Chinese eCommerce website, JD.com Inc., to 12.1%, up from the 10.8% stake it had in Oct 2016, and its 5.9% stake in Jun 2016.
Zacks Rank and Key Picks
Wal-Mart currently carries a Zacks Rank #4 (Sell).
Some better-ranked stocks in the retail sector are Zumiez, Inc. (ZUMZ - Free Report) , Dollar Tree Inc. (DLTR - Free Report) and Genesco Inc. (GCO - Free Report) . All these stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
While Zumiez has an expected long-term earnings growth of 15.0%, Genesco and Dollar Tree has an expected earnings growth of 9.5% and 16.7% respectively, for the next three to five years.
Zacks' Top Investment Ideas for Long-Term Profit
How would you like to see our best recommendations to help you find today’s most promising long-term stocks? Starting now, you can look inside our portfolios featuring stocks under $10, income stocks, value investments and more. These picks, which have double and triple-digit profit potential, are rarely available to the public. But you can see them now. Click here >>