Retail giant Wal-Mart Stores, Inc. (WMT), with its annual dividend hike to $1.59 per share from $1.46 per share, boasts of a tradition of dividend increase since 1974 annually.
The company’s board of directors has hiked its dividend by 8.9% to $1.59 to be paid in fiscal 2013 which ends on January 13, 2013. The dividend will be paid in four equal quarterly installments of 39.75 cents per share. The first installment would be payable on April 4 to shareholders of record on March 12. We note, however, that the current dividend increase is much less than the previous years’ dividend increases of 21% in fiscal 2012, 11% in fiscal 2011 and 15% in fiscal 2010.
Further, the move comes almost two weeks after the company posted outstanding fourth quarter and fiscal 2012 earnings of $1.44 and $4.49 per share, which were 7.5% and 10.3% higher than the year-ago earnings. In addition, the company also reported better-than-expected comparable store sales last week, and paid $5.0 billion in dividends for the year.
In the recent past, The Coca Cola Company (KO) also hiked its annual dividend by 8.5% to 51 cents per share from 47 cents per share for the year 2012. The first quarterly dividend is payable on April 1, 2012 to shareholders of record on March 15, 2012.
Wal-Mart, which holds a Zacks #3 Rank implying a short-term Hold rating, has 10,130 retail units under 69 different banners in 27 countries. With fiscal year 2012 sales of approximately $444 billion, Wal-Mart employs more than 2 million associates worldwide. Over the long term, we provide a Neutral recommendation on the stock.
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