The Dynamic Dividend

The Day Walmart’s Stock Paid 3%

Nine weeks ago, I put out a Yield Alert for Wal-Mart Stores (WMT), letting readers know the stock’s yield was approaching 3% for the first time in history. Thanks to some extreme market turmoil, it eventually did reach a point where investors could lock in a 3% yield — but only for a day.

In my original post (For The First Time Ever, Walmart’s Yield Approaches 3%), I published a couple of charts showing Walmart’s yield action since the turn of the century. Below are a couple of new charts which follow the same concept, but focus on the last nine weeks.

As you can see, the stock wasn’t immune to the market’s major selloff at the start the month. It sunk to a new 52-week low of $48.31 on August 10 and ended the session just a dime higher. At that closing price, the stock featured a 3.05% yield — the first time it had ever carried 3% yield overnight.

The stock has since bounced back, led by the strong second quarter earnings reported by the company earlier this week. It closed Thursday’s session trading at $51.79, where it features a 2.82% dividend yield.

A select handful of investors with the foresight to recognize — and fortitude to seize — an historic opportunity amid market anxiety locked in a 3% yield from one of the most prolific dividend growth stocks in the history of retail. And in a matter of months, they’ll be sitting on an even fatter yield-on-cost, when Walmart inevitably raises its dividend for the 38th consecutive year.

Walmart has improved its dividend output every year dating back to 1975, earning Class C Dividend Dynamo status. The company gave its shareholders a 21% raise back in March, its biggest dividend hike in four years.