Wal-Mart’s Great Dividend Story: Cash Flow Monster Shares the Wealth
The dividend keeps rising at Wal-Mart (WMT), and thanks to a market grown skeptical on the giant retailer, so does the dividend yield.
The payout ratio keeps rising, as Wal-Mart shares more of the wealth, but it remains conservative.
Wal-Mart’s PE has fallen along with its revenue growth.
Even with slower growth, Wal-Mart churns out enviable increases in net income, and even higher growth in EPS.
Huge cash from operations comfortably funds stock buybacks, which boost the EPS, and store growth through capital spending, and with a nice dividend.
Wal-Mart’s dividend yield, below 3%, isn’t likely to get yield junkies excited enough to buy the stock, and that’s OK. This is a long-term play, with an increasingly mature company to date beautifully managing its transition from growth. Among the largest-stocks, Pharma shares such as AstraZeneca (AZN), GlaxoSmithKline (GSK), Novartis (NVS), Merck (MRK), Bristol-Myers (BMY) and Pfizer (PFE) offer far fatter dividend yields. But their future revenues are more suspect, given huge patent expirations on big-selling drugs and the poor recent record of the drug industry in developing new medicines. Check out the Pharma stock charts here.