A company's overall value, also known as its market cap, is an important measure of its success. The higher a company's market cap is, the more it's worth, but forces like competition and market conditions can drag any company's market cap down. That explains why only eight publicly traded companies have reached a $1 trillion market cap. However, some analysts think this dividend king stock could become the 9th member of the trillion-dollar club.
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Walmart (NYSE: WMT)
America's love of getting more for less helps explain Walmart's rise from a Rogers, Arkansas, retail store offering low-priced items of all kinds to the world's biggest retailer, according to Statista. America's retail landscape was vastly different when Sam Walton opened the first Walmart in 1962. At that time, most department stores catered to higher-end clientele and anchored shopping malls.
They were also primarily centered around major cities or outlying suburbs. However, Walmart's business model was just the opposite. Sam Walton had the vision to realize that the retail needs of rural and working Americans in major cities were going underserved and he opened Walmart to fill that need. Today, Walmart's superstores have become common sights all over the globe. It even has a membership-only outlet, Sam's Club, to challenge Costco.
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According to Walmart's website, the retail giant has 10,600 stores in 19 countries and employs 2.1 million people. All those outlets add up to a lot of revenue and a huge market cap rate. Walmart's Q3 2025 earnings report posted an impressive $0.58 earnings per share (EPS) and $169.59 billion in revenue, exceeding the consensus analysts' expectations of $0.53 EPS and $167.72 billion.
Yet, Walmart's $735 billion market cap has caught analysts' attention. Walmart shares are trading at $91.51, which means they have surged in value by nearly 50% in just the last 12 months. If that upward climb continues through 2025, Walmart could join Apple, Nvidia, Meta, Tesla, Alphabet, Amazon, Microsoft and Warren Buffett's Berkshire Hathaway as the world's only trillion-dollar companies.
However, there is one big distinction between Walmart and most other members of the trillion-dollar club: Walmart is also a dividend king by having increased its shareholder payout for 51 consecutive years. Walmart's dividend is 0.93%, which translates to $0.85/per share, as per our Benzinga report. If Walmart's market cap continues rising, the rate of dividend increases may slow, but shareholders would still benefit from the increased share value.
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This gives Walmart the rare distinction of being a stock capable of generating passive income for shareholders while simultaneously delivering tremendous growth. Walmart has proved incredibly resilient since its founding and the number of Walton family members on America's richest people list underscores its staying power. It has a strong business model and large market share.
All this plays in Walmart's favor as it approaches the $1 trillion threshold. If there is any potential threat looming on the horizon, it could be tariff-related. Walmart relies heavily on manufacturers in China and Mexico to provide its low-cost items. However, President-elect Donald Trump has signaled his intention to levy tariffs on products from both countries.
A $1 trillion market cap is possible if Walmart can navigate these challenges. Even if Walmart doesn't join the trillion-dollar club, it remains a dividend king with room for upside. This stock is a strong candidate for a buy-and-hold addition to your portfolio.
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© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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