02-21-2014, 12:56 PM
Still on the fence but for now thinking I will put WMT on probation and hold. A quick read through release shows they are expanding capital outlays to increase small neighborhood store formats by about $600M, which I think is a good idea. That $600M is roughly what a 10% increase in the dividend would have cost the company.
I can also see the point of maintaining stock buybacks rather than increasing dividends at the expense of buybacks considering the current valuation. The company has a long history of decreasing the share count, which boosts EPS in the long. With shares trading at around a 14 PE I can understand why they would continue to buy shares.
Still not happy with the paltry 2% boost, but I feel a little better about it now after digging deeper.
I can also see the point of maintaining stock buybacks rather than increasing dividends at the expense of buybacks considering the current valuation. The company has a long history of decreasing the share count, which boosts EPS in the long. With shares trading at around a 14 PE I can understand why they would continue to buy shares.
Still not happy with the paltry 2% boost, but I feel a little better about it now after digging deeper.