Walmart (WMT) has consistently demonstrated resilience in an evolving economic landscape. Walmart is the world’s largest retailer with a presence in over 19 countries with 10,500 stores and clubs. Walmart stock is known for its stability, consistent dividend payouts, and long-term growth potential.
Its business model is based on low-cost leadership, effective supply chain management, and an expanding digital presence. This has enabled the company to become a consistent dividend payer, demonstrating its commitment to shareholder returns. Along with its fiscal 2025 earnings results, the company also announced a 13% annual dividend hike, its largest increase in over 10 years.
Valued at a market cap of $762.9 billion, Walmart is close to joining the elite $1 trillion market capitalization club. Walmart’s stock is up nearly 6% year-to-date, compared to the S&P 500 Index’s ($SPX) fall of 1.5%. Let’s find out if this dividend stock is a buy now.
Walmart Is a Reliable Dividend Stock
Despite macroeconomic headwinds and competition from e-commerce giant Amazon (AMZN), Walmart’s stock has seen impressive growth over the past few years. Digital transformation, customer loyalty, strong earnings, and increased consumer spending can be credited to this growth. Walmart’s forward dividend yield of 0.98% is below the consumer staples average of 1.89%. However, the company’s consistency in dividend payments and increases has made it a reliable income stock.
Recently, Walmart’s board of directors announced a 13% increase in its annual dividend, bringing it to $0.94 per share in its fiscal 2026. It marked the company’s 52nd consecutive year of dividend increases, showcasing its commitment to returning value to shareholders. What’s more impressive is Walmart is a member of the Dividend Aristocrats, a group of S&P 500 companies that have raised dividends for 25 consecutive years. Walmart is also a member of the S&P 500 Dividend Kings group, companies which have increased dividends for the past 50 years.
The recent 13% dividend hike further signals management’s confidence in Walmart’s financial health and future prospects in the face of macroeconomic headwinds. Furthermore, the company’s forward payout ratio of 31.8% indicates that its current earnings can support dividend payments while leaving room for growth.
In the most recent fiscal fourth quarter of 2025, revenue increased 4.1% to $180.6 billion, while adjusted earnings increased 10% to $0.66 per share. For the full fiscal year 2025, revenue increased 5.1% to $681 billion, while adjusted earnings increased 13.1% to $2.51 per share. Walmart has also aggressively expanded its e-commerce presence as Amazon rules the space. E-commerce sales rose 16% globally in the fourth quarter. Walmart is also expanding into healthcare and financial services, proving it is a diversified player beyond retail.
To streamline operations and reduce costs, Walmart has been incorporating artificial intelligence (AI)-driven analytics, robotics, and automation. Walmart has selected Symbotic (SYM), a leading innovator in AI-enabled robotics, for supply chain automation. According to the agreement, Symbiotic will design and implement an advanced automation system based on its cutting-edge AI-enabled robotics platform. Walmart will invest $520 million in Symbotic, including a $230 million upfront payment at the acquisition’s closing. Over the next few years, Walmart plans to purchase and deploy 400 of these Accelerated Pickup and Delivery centers in all of its stores, with an option to expand in the future.
As the world’s largest retailer, the company is in a strong financial position to adapt to the ever-changing retail and e-commerce landscape. It ended the year with cash and cash equivalents totaling $9 billion and a manageable debt-equity ratio of 0.44x. In fiscal 2025, the company had a free cash flow balance of $12.7 billion and distributed $6.7 billion in dividends.
Despite the aggressive dividend hike, investors appeared disappointed with Walmart’s adjusted earnings guidance for fiscal 2026, which could range from $2.50 to $2.60, representing a minimal increase over fiscal 2025. The stock has dipped 8% since the earnings release. However, analysts predict a rebound in earnings of 12.1% in fiscal 2027. Furthermore, analysts predict that Walmart’s revenue will rise by 4.1% to 4.6% over the next two years.
Is WMT Stock a Buy, Hold, or Sell on Wall Street?
Overall, on Wall Street, Walmart stock has earned a “Strong Buy” rating. Out of the 36 analysts covering WMT stock, 30 have a “Strong Buy” recommendation, four rate it a “Moderate Buy,” and two recommend it is a “Hold.” Its average price target of $109.94 suggests upside potential of 15.7% from current levels. However, its Street-high estimate of $120 implies potential upside of about 26.3% in the next 12 months.
The Bottom Line on WMT Stock
Walmart’s recent dividend increase is a positive indicator of its business stability and trust in generating higher earnings in the future. However, investors should keep in mind that Walmart is a well-established company rather than a high-growth stock like AI firms. Still, its solid fundamentals, steady dividend growth, and expansion strategies make it an appealing choice for long-term investors seeking both growth and income.
