Comparing Dividends: Walmart vs. Macy's
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 6 days ago
0mins
Source: Fool
- Walmart's Profitability: In the fiscal third quarter ending October 31, Walmart's adjusted operating profit grew 8% year-over-year to $7.2 billion, demonstrating its strong profitability that supports ongoing dividend payments, having raised dividends for over 50 consecutive years, earning the title of Dividend King.
- Macy's Turnaround Plan: Macy's reported a 3.4% increase in same-store sales for Q3 2023, indicating early success in its turnaround strategy; despite challenges, its 3.2% dividend yield attracts income-seeking investors.
- Free Cash Flow Comparison: Walmart generated $8.8 billion in free cash flow over the past nine months, significantly exceeding its $5.6 billion dividend payout, indicating financial strength; in contrast, Macy's free cash flow was $545.7 million, sufficient to cover its $200 million dividend payout, but still requires caution.
- Investment Risk Assessment: While Macy's higher dividend yield is appealing, the uncertainties in its turnaround process suggest that risk-averse investors should be cautious, whereas Walmart's stable earnings and history of dividend growth make it suitable for long-term investors.
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Analyst Views on WMT
Wall Street analysts forecast WMT stock price to fall
26 Analyst Rating
25 Buy
1 Hold
0 Sell
Strong Buy
Current: 128.850
Low
119.00
Averages
125.75
High
136.00
Current: 128.850
Low
119.00
Averages
125.75
High
136.00
About WMT
Walmart Inc. is a technology-powered omnichannel retailer. The Company is engaged in the operation of retail and wholesale stores and clubs, as well as eCommerce Websites and mobile applications, located throughout the United States (U.S.), Africa, Canada, Central America, Chile, China, India and Mexico. It operates in three reportable segments: Walmart U.S., Walmart International and Sam's Club U.S. The Walmart U.S. segment includes the Company's mass merchandising concept in the U.S., as well as eCommerce, which includes omni-channel initiatives and certain other business offerings such as advertising services. The Walmart International segment consists of the Company's operations outside of the U.S. through its subsidiaries, as well as eCommerce and omni-channel initiatives. The Sam's Club U.S. segment includes the warehouse membership clubs in the U.S., as well as samsclub.com and omni-channel initiatives.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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