Is Walmart Inc. (WMT) the best retail dividend stock to buy?
Recently, I’ve published a list of Buy 11 Best Retail Dividend Stocks. In this article, we look at where Walmart Inc. (NYSE: WMT) competes against other top retail dividend stocks.
The retail industry has been digitally transforming since the Covid-19 pandemic. The industry has shifted from a wide range of supply-driven models to a more data-focused, hyper-personal approach tailored to individual customers. However, the migration was difficult due to rising costs and the complexity of existing business models and legacy systems.
According to a Deloitte report, the industry has been slowing in recent years, with compound annual growth rates ranging from 1.5% to 3.5%, depending on the subsector. Profit ratios are also under pressure due to consumer expectations for a seamless omnichannel experience. Although digital adaptation was required, the associated costs increased the hunger for retailers to increase efficiency, establish strategic partnerships, and investigate alternative revenue streams to remain relevant and competitive.
Technology and automation are emerging as promising solutions as retailers strive to improve operations with limited resources. In particular, generative artificial intelligence moves beyond the initial hype and creates measurable benefits. According to Deloitte, retailers who integrated AI-powered chatbots during Black Friday have improved conversion rates by 15%. The report also said that six in 10 retail buyers reported improved demand forecasts and inventory management for 2024. Digital efficiency will become a priority, and 2025 could mark a turning point in progress in several areas, including merchandising, supply chain management, and marketing. In particular, we expect seven in 10 retail executives to implement AI capabilities within the year to enhance their personalization efforts.
Consumer spending increased at a slower pace than expected in February. However, underlying data suggests strong sales despite concerns about slowing economic slowdowns and high inflation. The report was released during high uncertainty about economic growth, particularly as President Donald Trump’s policies led to a surge in tariff disputes with key US trading partners. Economists have expressed concern that these tariffs could contribute to higher inflation and weaken economic momentum. Retail sales rose 0.2% in February, rebounding after a revision of a 1.2% decline downwards the previous month, but preliminary data from the commerce division shows Dow Jones’ estimates increased by 0.6%. The data also highlighted a 0.3% rise in retail sales, except for car sales that matched market expectations.
According to the report, online spending played a key role in driving sales growth for the month as non-store retailers reported 2.4% growth. Additionally, health and personal care sales also experienced a 1.7% increase, while the food and beverage sector saw growth of 0.4%. Overall, retail sales rose 3.1% compared to the same period last year, surpassing the 2.8% inflation rate measured by the consumer price index.
The retail sector has been largely stable since the pandemic and has become an investment area worth considering. Investors are drawn to the sector with the aim of taking advantage of the growing consumer demand. Additionally, the sector is known for its history of providing dividend payments to shareholders. According to a report by Janus Henderson, the general retail division distributed $8.4 billion in dividends in the third quarter of 2024, a significant increase from $2.8 billion in the same period in 2020.
Buy 11 Best Retail Dividend Stocks
Managers standing in the hypermarket point out items that can be used for wholesale.
Our Methodology:
In this article, we scanned the database of Insider Monkey, more than 1,000 hedge funds as of the fourth quarter of 2024, and selected companies operating in the retail industry. These companies sell products and services directly to consumers for personal use through physical stores, online platforms, or a combination of both. From that list, we chose the 11 shares with the highest number of hedge fund investors and promoted them to them in ascending order of hedge fund sentiment.
At Insider Monkey, I’m obsessed with hedge funds. Why are hedge funds interested in the stocks they accumulate? The reason is simple. Our research shows that mimic the top stock picks of the best hedge funds can outperform the market. Quarterly Newsletter’s strategy was to select 14 small and large caps per quarter, returning 373.4% since May 2014, surpassing the benchmark by 218 percentage points (For more information, please see here).
Number of hedge fund holders: 116
Walmart Inc. (NYSE: WMT) is an American retailer that operates a chain of hypermarkets, discount stores and grocery stores across the United States.
In December 2024, Walmart Inc. (NYSE: WMT) completed its $2.3 billion acquisition of Vizio, integrating the SmartCast operating system into the ecosystem. The move will improve Walmart’s ability to improve the customer shopping experience while providing additional opportunities to advertisers through Walmart Connect. Vizio’s powerful advertising business has more than 19 million active accounts, further strengthening the initiative.
In the fourth quarter of 2024, Walmart Inc. (NYSE: WMT) reported a 4.1% increase in revenue, reaching $180.6 billion, with a constant currency growth of 5.3%. Operating profit increased by 8.3%, supported by improved gross profits, increased membership income and increased e-commerce profitability. During the entire fiscal year, the company generated $36.4 billion in operating cash flow and closed the year with $9 billion in cash equivalents. Additionally, Walmart has announced that it will buy back $4.5 billion in shares, with a quarterly dividend of $0.235 per share, up 13%.
Walmart Inc. (NYSE: WMT) currently offers a quarterly dividend of $0.235 per share, up 13% in February. This represents the company’s 52nd consecutive year of dividend growth. The stock’s dividend yield was 1.10% as of March 29th.
Overall, WMT 1st place On the list of the best retail dividend stocks to buy. While we acknowledge the potential of WMT as an investment, our belief lies in the belief that some deeply undervalued dividend stocks offer higher returns and are greater promise for doing it within a shorter time frame. If you’re looking for a deep, undervalued dividend stock that’s more promising than WMT, but trades at 10 times its revenue and is increasing its revenue at a digit rate of twice the year, Cheap dividend stocks with dirt.
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Disclosure: None. This article was originally published Insider Monkey.
