One of the best-known names in the country is shaping up to be one of the best bets for a retired person’s portfolio. For years it had been thought of as one of the best growth plays, but it is shifting to a great dividend payer, too – Wal-Mart (NYSE: WMT).
I know the recent quarters haven’t been as hot as in years past, but this company has paid a dividend since 1973 and has increased it every year for the past 39 years. And its most recent dividend increase, in March of this year, was 18.2%.
WMT is a member of the Dividend Aristocrats Index and has repurchased 4% of its outstanding shares every year for the past five years.
Companies don’t get any more stockholder friendly than this one.
It is currently focusing on maximizing the investment return on its current U.S. stores and improving their ambience, which could increase its already dominant market share.
And it is the largest U.S. retailer, which gives it an incredible pricing advantage.
But its development in the international markets is why, going forward, you want to own it.
WMT is just getting started in China and India. Emerging markets account for only one-third of the company’s revenues, but the combination of rising populations and increasing per capita income in these two key markets, combined with Wal-Mart’s enormously efficient retail experience, will fuel a lot of growth and income for many years to come.
The current average 18% annual dividend increase will account for a double in the payout every four years. And, despite this big number, it has the revenues to maintain a healthy payout ratio.
Its current yield is only about 2.5%, but this is a future-growth and dividend-growth play, not a current rich-yield story with an iffy future. A double in income every four years should be enough to satisfy even the toughest retiree’s criteria. This one will just require a little patience, which is why most dividend buyers are ignoring it.
Move outside the herd and look down the road. Wal-Mart is a must consider.
Editor’s Note: The compounding power behind rising dividend yields like Wal-Mart’s is core to the investment philosophy in Marc Lichtenfeld’s best-selling book, Get Rich with Dividends.
His follow-up newsletter, The Oxford Income Letter, takes things one step further. Marc maintains three updated portfolios full of his favorite income-generating stocks. And each month he shares brand-new recommendations with readers.
His latest is a cheap healthcare REIT with a steadily growing 6.6% yield. To learn more about Marc’s strategy and how to subscribe to The Oxford Income Letter, click here. It’s truly the safest, most reliable way to build lasting wealth.