Walmart has surged approximately 73% over the last year, outperforming many of its retail peers and the broader market. The company has also demonstrated a commitment to shareholder returns, with a 51-year track record of consecutive annual dividend increases. In April 2024, the firm raised its quarterly dividend 9.2%.
Strategic initiatives, including a focus on technology and improving the shopping experience, have attracted more affluent customers while maintaining the firm’s core value proposition. That’s why this stock remains one of our favourite long-term picks.
The shares trade at 37.2 times the company’s forward earnings forecast, a premium that can be justified by its market leadership, consistent growth and its potential for further expansion in its high-margin ancillary businesses.
WALMART INC. (New York symbol WMT) is the world’s biggest retailer, with over 10,660 outlets in 19 countries.
Walmart recently sold its entire 9.4% stake in Chinese e-commerce retailer JD.com (New York symbol JD for roughly $3.7 billion.
Walmart first formed a partnership with JD.com in 2016. The collaboration was aimed at boosting the popularity of U.S.-made products in China and letting shoppers directly buy from Walmart stores on the JD.com platform.
The company plans to use the cash to build out its physical networks in China, including its regular Walmart stores, Sam’s Club membership warehouses and delivery services.
Meanwhile, Walmart continues to benefit as inflation draws more shoppers to its value-focused stores, particularly for groceries and health products. It’s also profiting from a rebound in demand for general merchandise such as household products, electronics and toys.
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Blue Chip Stocks: Quarterly revenues and earnings rose strongly at Walmart
In the fiscal 2025 third quarter, ended October 31, 2024, sales rose 5.5%, to $169.6 billion from $160.8 billion a year earlier. That beat the consensus forecast of $167.7 billion.
Walmart’s U.S. same-store sales (including online) rose 5.3%. That was due to a higher number of transactions (up 3.1%) and higher selling prices (up 2.1%). As well, U.S. online sales jumped 22% while advertising revenue rose 26%.
If you factor out gains and losses on investments and other unusual items, earnings per share rose 13.7%, to $0.58 from $0.51. That also topped the consensus estimate of $0.53 a share.
Walmart now expects its sales for all of fiscal 2025 (excluding businesses it recently sold and currency rate fluctuations) to rise between 4.8% and 5.1%. That’s up from its earlier forecast of 3.75% to 4.75% growth.
The retail giant also lifted its full-year earnings forecast, to between $2.42 and $2.47 a share from $2.35 to $2.43 a share. The stock, which hit a new all-time high of $96.18 recently, trades at 37.2 times the midpoint of that new range. While that’s a high multiple, it’s still an acceptable p/e in light of Walmart’s high market share and fast-growing online and advertising businesses.
With the April 2024, payment, Walmart raised your quarterly dividend by 9.2%. Investors will then receive $0.2075 a share instead of $0.19. The new annual rate of $0.83 yields 0.9%.
Walmart has raised the annual dividend rate each year for the past 51 years. Over the past five years, that payment has increased at an average annual rate of 3.3%. The stock holds our Highest TSI Dividend Sustainability Rating.
Recommendation in Wall Street Stock Forecaster: Walmart Inc. is a buy.
