We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Walmart Soars on Earnings, Dividend & Vizio Deal: ETFs to Buy
Read MoreHide Full Article
Before the opening bell yesterday, Walmart (WMT - Free Report) reported robust fourth-quarter fiscal 2024 results, wherein it surpassed both earnings and revenue estimates. The megaretailer spread strong optimism about the company’s growth prospects by providing a big boost to its annual dividend and unveiling the $2.3 billion takeover of smart TV maker Vizio (VZIO - Free Report) .
This has sent WMT shares to a record high. Investors seeking to tap the opportune moment should consider ETFs having the highest allocation to the world's largest brick-and-mortar retailers. These include Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) , VanEck Vectors Retail ETF (RTH - Free Report) and iShares U.S. Consumer Focused ETF (IEDI - Free Report) .
Walmart’s Earnings in Focus
Earnings per share came in at $1.80, outpacing the Zacks Consensus Estimate of $1.65 and improving 5.3% from the year-ago earnings. Revenues rose 5.7% year over year to $173.4 billion and topped the consensus mark of $170.6 billion. U.S. comparable sales grew 4%. Notably, e-commerce sales surged 23%, surpassing the $100 billion annual sales milestone as shoppers turned to the big-box retailer throughout the holiday season (read: 3 Factors to Bet on U.S. Consumer ETFs).
The mega-retailer provided fiscal 2025 guidance. It expects revenues to rise 3-4% from the year-ago level and earnings per share in the range of $6.70-$7.12. For first-quarter fiscal 2025, Walmart expects sales to grow 4-5% and adjusted earnings per share in the range of $1.48-$1.56.
Dividend Boost
Walmart raised its annual cash dividend by 9% to $0.83 per share on a post-stock split basis for fiscal 2025, reflecting confidence in its financial strength. The increase underscores the company's largest dividend boost in more than a decade and the 51st consecutive year of dividend increase.
Vizio Takeover Deal
Walmart agreed to buy a leading smart television manufacturer, Vizio, for $2.3 billion, or $11.50 per share.
This acquisition will significantly bolster Walmart's advertising business and grant it control of a substantial portion of the U.S. television market. The potential deal is seen as a strategic move by Walmart to leverage its vast shopper data and retail network to enhance its advertising capabilities, particularly through its Walmart Connect platform. This platform has shown robust growth, generating approximately $3 billion in sales last year.
Walmart's interest in Vizio aligns with its efforts to expand its retail media network, which has been growing rapidly. By acquiring Vizio, Walmart could potentially command over a fifth of the television market in the United States. This move could also enable Walmart to offer more advertising opportunities to consumer packaged goods companies across its network of 5,000 stores, visited by 130 million shoppers weekly.
Below, we have detailed the ETFs:
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
Fidelity MSCI Consumer Staples Index ETF offers broad exposure to the consumer staples sector by tracking the MSCI USA IMI Consumer Staples Index and holds 109 stocks in its basket. Of these, Walmart takes the fourth spot with a 7.8% share. Fidelity MSCI Consumer Staples Index ETF has amassed $1 billion in its asset base while trading in a good volume of around 130,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all Consumer Staples ETFs here).
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 104 stocks in its basket, with Walmart occupying the fourth position, having a 7.9% allocation. Vanguard Consumer Staples ETF manages a $6.3 billion asset base and charges a fee of 10 bps per year. VDC trades in a good average volume of around 124,000 shares per day and has a Zacks ETF Rank #3 with a Medium risk outlook.
VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the fourth spot with a 7.5% share. VanEck Vectors Retail ETF has amassed $182.8 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 6,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 4 ETF Areas to Play Despite Soft January Retail Sales).
iShares U.S. Consumer Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. It holds 185 stocks in its basket, with Walmart occupying the fourth position at 5.3% share. iShares U.S. Consumer Focused ETF has accumulated $16.4 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 3,000 shares a day, on average.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Walmart Soars on Earnings, Dividend & Vizio Deal: ETFs to Buy
Before the opening bell yesterday, Walmart (WMT - Free Report) reported robust fourth-quarter fiscal 2024 results, wherein it surpassed both earnings and revenue estimates. The megaretailer spread strong optimism about the company’s growth prospects by providing a big boost to its annual dividend and unveiling the $2.3 billion takeover of smart TV maker Vizio (VZIO - Free Report) .
This has sent WMT shares to a record high. Investors seeking to tap the opportune moment should consider ETFs having the highest allocation to the world's largest brick-and-mortar retailers. These include Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report) , Vanguard Consumer Staples ETF (VDC - Free Report) , VanEck Vectors Retail ETF (RTH - Free Report) and iShares U.S. Consumer Focused ETF (IEDI - Free Report) .
Walmart’s Earnings in Focus
Earnings per share came in at $1.80, outpacing the Zacks Consensus Estimate of $1.65 and improving 5.3% from the year-ago earnings. Revenues rose 5.7% year over year to $173.4 billion and topped the consensus mark of $170.6 billion. U.S. comparable sales grew 4%. Notably, e-commerce sales surged 23%, surpassing the $100 billion annual sales milestone as shoppers turned to the big-box retailer throughout the holiday season (read: 3 Factors to Bet on U.S. Consumer ETFs).
The mega-retailer provided fiscal 2025 guidance. It expects revenues to rise 3-4% from the year-ago level and earnings per share in the range of $6.70-$7.12. For first-quarter fiscal 2025, Walmart expects sales to grow 4-5% and adjusted earnings per share in the range of $1.48-$1.56.
Dividend Boost
Walmart raised its annual cash dividend by 9% to $0.83 per share on a post-stock split basis for fiscal 2025, reflecting confidence in its financial strength. The increase underscores the company's largest dividend boost in more than a decade and the 51st consecutive year of dividend increase.
Vizio Takeover Deal
Walmart agreed to buy a leading smart television manufacturer, Vizio, for $2.3 billion, or $11.50 per share.
This acquisition will significantly bolster Walmart's advertising business and grant it control of a substantial portion of the U.S. television market. The potential deal is seen as a strategic move by Walmart to leverage its vast shopper data and retail network to enhance its advertising capabilities, particularly through its Walmart Connect platform. This platform has shown robust growth, generating approximately $3 billion in sales last year.
Walmart's interest in Vizio aligns with its efforts to expand its retail media network, which has been growing rapidly. By acquiring Vizio, Walmart could potentially command over a fifth of the television market in the United States. This move could also enable Walmart to offer more advertising opportunities to consumer packaged goods companies across its network of 5,000 stores, visited by 130 million shoppers weekly.
Below, we have detailed the ETFs:
Fidelity MSCI Consumer Staples Index ETF (FSTA - Free Report)
Fidelity MSCI Consumer Staples Index ETF offers broad exposure to the consumer staples sector by tracking the MSCI USA IMI Consumer Staples Index and holds 109 stocks in its basket. Of these, Walmart takes the fourth spot with a 7.8% share. Fidelity MSCI Consumer Staples Index ETF has amassed $1 billion in its asset base while trading in a good volume of around 130,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all Consumer Staples ETFs here).
Vanguard Consumer Staples ETF (VDC - Free Report)
Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 104 stocks in its basket, with Walmart occupying the fourth position, having a 7.9% allocation. Vanguard Consumer Staples ETF manages a $6.3 billion asset base and charges a fee of 10 bps per year. VDC trades in a good average volume of around 124,000 shares per day and has a Zacks ETF Rank #3 with a Medium risk outlook.
VanEck Vectors Retail ETF (RTH - Free Report)
VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the fourth spot with a 7.5% share. VanEck Vectors Retail ETF has amassed $182.8 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 6,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 4 ETF Areas to Play Despite Soft January Retail Sales).
iShares U.S. Consumer Focused ETF (IEDI - Free Report)
iShares U.S. Consumer Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. It holds 185 stocks in its basket, with Walmart occupying the fourth position at 5.3% share. iShares U.S. Consumer Focused ETF has accumulated $16.4 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 3,000 shares a day, on average.