Walmart Sends an Urgent Message in the United States: Only Two Days Left!

Walmart Inc is about to pay dividends, which has sparked interest among many investors. Simply Wall St reported that in just two days, Walmart shares will trade ex-dividend. If you want to receive this payment, you must purchase the shares before March 21: the dividend will be paid on April 7, ideal for those seeking passive income.

What Does the Ex-Dividend Date Mean?

The ex-dividend date is important for investors: on this date, stock buyers are no longer entitled to receive the dividend. For those interested in Walmart's dividend, the deadline to purchase shares is March 21. Purchases made after that date do not qualify for the payment, which will be made on April 7.

Walmart Dividend Details

This quarter, Walmart will pay $0.235 per share. In the last 12 months, the company distributed a total of $0.94 per share. This represents an approximate yield of 1.1% based on the current share price of $85.35.

Although this yield is relatively low, it remains attractive to many investors seeking passive income. However, it is important to assess whether Walmart can maintain these dividend payments in the long term.

Is Walmart in a Strong Position to Pay Dividends?

A company's ability to pay dividends depends on its profits. If a company pays more than it earns, it could face difficulties. Walmart has a payout ratio of 34%, indicating that it is paying a moderate proportion of its earnings as dividends.

Additionally, it allocated 53% of its free cash flow to dividends last year. This level is sustainable for most companies that distribute dividends. The data suggest that Walmart is in a good financial position to continue paying dividends without compromising its stability.

Earnings Growth: A Key Factor for Sustainability

Earnings growth is essential to ensure the sustainability of dividends. Walmart has experienced a 6.9% annual increase in its earnings per share over the last five years. This steady growth suggests that the company has been generating value for its shareholders.

If earnings growth continues, Walmart will be able to keep paying dividends safely. However, it is important to note that Walmart allocates more than half of its earnings to dividends, which could limit its ability to reinvest in its business. If the company can't reinvest a significant portion of its earnings, growth may slow down.

Walmart's Historical Dividend Growth

Walmart has increased its dividends at an average annual rate of 3.7% over the last 10 years: this growth in payments is a good sign for investors. However, the fact that the company allocates a large portion of its earnings to dividends could limit its ability to increase the growth rate in the future. The company has managed to maintain this balance, but it must continue to monitor its profitability and free cash flow.

Is It Worth Investing in Walmart for Its Dividends?

Walmart has proven to be a reliable company in terms of dividend payments. Earnings per share have grown consistently, allowing the company to maintain its dividend policy. However, the relatively high payout ratio could limit future growth.

Walmart's dividend is attractive, but investors should consider that a significant portion of the earnings is allocated to payments. If the company's profitability decreases or it faces financial difficulties, dividends could be affected. Therefore, although the current dividend is attractive, the associated risks must be considered.