Wal-Mart ups its dividend

The company's financial position improves on higher fourth-quarter profits, but the U.S. market is still a big weak spot.

By Kim Peterson Mar 4, 2011 12:38PM
Credit: (©Mel Evans/AP)
Caption: Wal-Mart StoreWal-Mart (WMT) is doing something for the shareholders who have stuck with its underperforming stock. The company is upping its annual dividend by 21%.

Wal-Mart increases its dividend every year, but this year's boost is on the hefty side. The dividend grows to $1.46 from $1.21. The company will pay out 36.5 cents a share every quarter, in April, June, September and the following January. The stock was unchanged Friday on the news at $52.

The dividend increase follows other good news: Profits are up. The company notched a 27% increase in profit during the crucial fourth quarter, helped along by cost-cutting and international sales.

So finally, we're starting to see some positive movement here, but not all is well in Bentonville. All of Wal-Mart's growth now comes from overseas; in the United States, the retailer is struggling. The growth rate of same-store sales in the U.S. has been on the skids for seven straight quarters, and it looks like the current quarter will again be in negative growth territory. Sales in the U.S. also fell in the fourth quarter. The following video discusses Wal-Mart's U.S. problems in detail.

Post continues after video:
One of Wal-Mart's competitors, Sears (SHLD), also saw horrible sales performance last year and is overhauling its executive lineup as a result. But Target (TGT) had a fantastic fourth quarter, beating analyst estimates and seeing positive same-store sales growth in the U.S.

Another worry for Wal-Mart is that the competitive landscape just gets bigger. Now, shoppers are heading to Family Dollar (FDO) and Dollar Tree (DLTR), especially for food and pharmacy items, Daily Finance reports. Then there are discount clubs like Costco (COST), and of course Amazon (AMZN) and other online retailers.

And it seems that no matter what strategy Wal-Mart tries in the U.S. -- more price rollbacks, then reversing those rollbacks, and even reducing clutter -- nothing seems to be working.

Good thing the rest of the world is helping Wal-Mart keep those profits going. Now, the company just needs that stock price to do something.

1Comment
Mar 4, 2011 2:46PM
avatar
I wonder if Target will follow ????? probably not..
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