Wal-Mart Stores announced today that the company is increasing its annual dividend by 11%. The new dividend payment will be paid out in quarterly installments of $.3025 per share.
This will mark the 37th consecutive year that Wal-Mart has increased its dividend payment. Following the dividend increase, Wal-Mart will offer investors a current dividend yield of 2.3%.
Despite their tremendous cash flow, the world’s largest retailer remains one of the lower yielding dividend stocks in the Dow Jones index. The average dividend yield for Dow components is currently 2.8%. Even with the dividend increase, Wal-Mart remains a below average dividend stock. No doubt dividend investors would have liked Wal-Mart to significantly increase their dividend payout ratio which is currently at a very modest 30%.
Mike Duke, Wal-Mart President and Chief Executive Officer stated:
"We're very pleased that our financial position continues to allow us to pay shareholders an increased dividend again this year. With our free cash flow, Wal-Mart has the capacity to grow around the world, make strategic acquisitions, and fund returns to shareholders through dividends and share repurchases.""We remain committed to increasing shareholder value through our priorities of growth, leverage and returns," Duke added. "Our underlying operations remain strong, and we are focused on helping our customers save money so they can live better."
Wal-Mart shares are up less than 1% in 2010 after being one of only 6 Dow stocks to post negative returns in 2009.
Wal-Mart’s first quarter dividend will be payable on April 5, 2010 to shareholders of record as of March 12, 2010.
Author's Disclosure: No Positions