Walmart Became A Dividend King In 2024: Should You Invest?

Walmart, the largest retail company in the world in terms of revenue, joined the prestigious ranks of Dividend Kings in 2024. The retail giant raised its dividends for 51 consecutive years as of February 2024, leading to its inclusion in the highly coveted group. 

Walmart pays $0.83 annually, yielding 1.17% on the current stock price. The company last increased its annual payout by 9% earlier in February, marking the largest increase in over a decade. Notably, Walmart's four-year average dividend yield stands at 1.51%. 

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"Dividends continue to be a part of our diversified capital returns approach. We’re proud to be increasing our annual dividend for the 51st consecutive year. This year's nine percent increase is the largest in over a decade, and a sign of our confidence in our growth potential and cash flow," Walmart's CFO and executive vice president, John David Rainey, stated in a news release. 

Not Just an Income Stock 

Despite its solid track record in paying dividends, Walmart isn't known for its dividend payouts, given the low yield. However, despite increasing competition, the company has maintained a strong foothold in the retail space, allowing it to sustain a robust growth rate. 

Over the past few months alone, Walmart has expanded its InHome delivery service and opened several new fulfillment centers. For the fiscal first quarter ending April 16, Walmart's revenues increased 6% year-over-year to $161.5 billion, while adjusted operating income rose 13.7% from last year to $7.1 billion. The company's earnings per share came at $0.60 per share, marking a 22.4% improvement from the prior year quarter. 

Interestingly, Walmart's shares have risen by over 34% this year, outperforming the benchmark S&P 500 index's 16.6% gains. Over the past year, WMT stock gained 32.7%, beating the S&P 500 index's 22.1% returns. 

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Future Growth Trajectory 

Analysts expect Walmart's revenues to increase 13.8% year-over-year to $676.73 billion in the current fiscal year. On the other hand, the consensus EPS estimate of $2.43 for the current year indicates a nearly 20% rise from the same period last year. Furthermore, Wall Street expects Walmart's EPS to grow at a compound annual growth rate of 8.2% per annum over the next five years. 

KeyBanc Capital Markets has an "Overweight" rating on WMT stock with a price target of $82, indicating a potential upside of over 16%. Piper Sandler also maintains a similar "Overweight" rating on Walmart with a price target of $81, indicating a potential upside of nearly 15%. 

Stable Payouts 

Walmart's financials and future potential make it an excellent growth stock, ideal for investors who can stomach a little risk for significant capital appreciation. However, the retail giant fails to make a compelling case as a dividend stock for income investors, as its dividend yield is lower than the yield on U.S. Treasurys. 

While Walmart certainly demonstrates resilience, given its history of raising dividends for 51 years, its low payout might deter investors looking to build a solid portfolio for passive income. 

Are You Missing Out On Higher Yields?

The current high-interest-rate environment has created an incredible opportunity for income-seeking investors to earn massive yields, but not through dividend stocks… Certain private market real estate investments are giving retail investors the opportunity to capitalize on these high-yield opportunities and Benzinga has identified some of the most attractive options for you to consider. 

For example, the Jeff Bezos-backed investment platform just launched its Private Credit Fund, which provides access to a pool of short-term loans backed by residential real estate with a target 7% to 9% net annual yield paid to investors monthly. The best part? Unlike other private credit funds, this one has a minimum investment of only $100. 

Don't miss out on this opportunity to take advantage of high-yield investments while rates are high. Check out Benzinga's favorite high-yield offerings. 

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