My last investment was on my watchlist for a couple of months. I was just waiting to buy it at a better yield. Anyway as Wal Mart announced a pessimistic business development for the next couple of years, the price per share dropped by almost 10% and as a consequence of it the yield is now at around 3.1 %.
Although the short term outlook is not so positive I decided to add Wal Mart to my portfolio. First of all the fundamentals still look very good and second of all it has a very conservative financial management, currently the pay out ratio is at around 40%, which allows further dividend growth. Enclosed a possible development until the 2019.
Wal-Mart Stores, Inc. (WMT) is an American multinational retailer corporation and was founded in 1962 it is headquartered in Bentonville, Arkansas. It owns more than 10,800 stores in 27 countries and is the largest private employer in the world. Wal-Mart is a dividend aristocrat that has increased its annual cash dividend every year since it established a $0.05 dividend in 1974.
Financial Data 2014
Revenue: 473,076 MIO USD
Net income: 15,918 MIO USD
earnings per share: 4.85 USD
Dividend: 1.96 USD
Payout Ratio: 43.3%
Average dividend growth last 3 years per year: 11%
Dividend growth: 40 years
All in all I purchased 19 shares with a value of 61,02USD per share, so in total 1,159.38 USD. This will add 36.48 USD to my dividend income based on a dividend of 1.96 USD per share.
Although the short term outlook is not so positive, I am still convinced that in the long run Wal Mart is a very good investment with a lot of potential for dividend growth.
What do you think about this purchase? Please feel free to give your comments about it.
Disclosure: I do not recommend any decision to the reader or any user, please consult your own research. Thank you for your understanding.