2024-06-06 23:32:11 ET
Summary
- Walmart stock's current dividend yield is at a record low of 1.19%, indicating overvaluation.
- The stock has a healthy growth outlook, with an expected EPS compound annual growth rate of 7.3% over the next 10 years.
- The growth has already been fully priced in with a PEG ratio of 3.8x.
WMT stock: dividend yield at record low
I last covered Walmart ( WMT ) stock in October 2023 (see the chart below). At that time, the stock just joined the elite club of Dividend Kings after increasing its dividend payouts consecutively for 50 years. My article argued for a bullish thesis based on the following two considerations:
Dividend growth investors may complain about WMT's low yield and slowed dividend raises in recent years. For long-term investors, the focus should be on total shareholder yield instead of dividend yield. When the total shareholder yield is considered, the picture changes quite a bit as WMT has been consistently buying back its own shares over the past at a robust pace.
In terms of valuation, given its competitive advantages, the stock deserves a valuation premium above the sector average. And its current valuation multiples are close to (or below) its historical averages. For example, its FWD earning yield of 4.13% is higher than its 5-year average of 4.01%.
Read the full article on Seeking Alpha
For further details see:
Walmart Stock: Omnichannel Growth Potential Fully Priced In