Wal-Mart boosts annual dividend by 9 percent

[March 02, 2012]  NEW YORK (AP) -- Wal-Mart Stores Inc. is raising its dividend by 9 percent, continuing a tradition of increasing its annual shareholder payout -- but limiting the boost to its smallest percentage since fiscal 2009.

The world's biggest retailer said it will pay a quarterly dividend of 39.75 cents on April 4 to shareholders of record on March 12. That works out to $1.59 per share for the year. The increase follows an almost 21 percent gain in fiscal 2012, which ended in January. And it compares with a hike of just less than 8 percent in fiscal 2009.

The modest increase may suggest the pressure Wal-Mart is facing as the discounter invests more in its "everyday low price" strategy amid increasing competition and a still slowly recovering economy, some analysts say.

"They're investing so much in price they don't want to get locked into a higher dividend growth rate given their margins are under pressure," said Brian Sozzi, chief equities analyst at NBG, an independent research firm.

Still, the Bentonville, Ark., company has increased its dividend every year since its first declared dividend in March 1974. That continued even during the thick of the recession. The company raised its dividend by almost 21 percent in fiscal 2012, 11 percent in fiscal 2011, and 14.7 percent in fiscal 2010, according to Howard Silverblatt, senior index analyst at Standard & Poor's.

Wal-Mart President and CEO Mike Duke also said Thursday that the company's U.S. business is back on track, while international results remain strong.

Other selected retailers reported strong February sales on Thursday, as Americans stepped up their spending and offered the latest sign of confidence in the economy. Overall, the merchants reported a 6.7 percent increase in a key revenue measure for February compared with a year earlier, according to the International Council of Shopping Center's tally of 21 retailers, the biggest gain since June 2011.

Wal-Mart Stores no longer releases monthly sales data, but last month the company reported its fourth-quarter results, which showed its business is rebounding in the U.S. The company posted its second consecutive quarterly gain in revenue at stores opened at least a year at its namesake Wal-Mart stores in the U.S. This figure is a key gauge of a retailer's health because it excludes results from stores recently opened or closed.

The company's business had suffered in part because it veered away from offering low prices across the store, and relied more on temporarily slashing prices on select items.

Wal-Mart draws nearly 10 percent of all nonautomotive spending in the U.S. Its U.S. business makes up 62 percent of the company's revenue.

Wal-Mart has 10,130 stores in 27 countries. It had fiscal 2012 sales of about $444 billion.

Its stock fell 36 cents to $58.72 in afternoon trading while the broader markets edged higher. Shares of Wal-Mart have traded between $48.31 and $62.63 over the past year.

[Associated Press]

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