Walmart (WMT 0.94%) has hiked its dividend payment for 53 consecutive years.
During that time, there have been wars, a financial crisis, and a pandemic. Yet Walmart was able not only to pay out its dividend but also to increase it.
Here's how the retail giant can keep increasing those payouts for another 53 years.
Image source: Getty Images.
Pricing power
Given the 270 million customers visiting its stores and online shopping sites each week, companies desperately want their products to land on Walmart's shelves. So Walmart gets to dictate costs to suppliers, allowing the retailer to maintain its reputation for low prices. That also allows Walmart to keep its own costs low and margins high, even if it has to pay tariffs and inflation remains stubborn.
With its private-label brands, like Great Value, Walmart also sets low prices. That's another strategy to force suppliers to keep their prices from rising too high, as suppliers with competing products don't want to lose market share within a Walmart store.
A cash cow with a sustainable dividend
Because of the number of customers it is able to attract, Walmart brings in billions of dollars of net income each year that it can use for shareholder-friendly moves, like buybacks and dividends.
NASDAQ: WMT
Key Data Points
It doesn't have an eye-catching dividend payout, as it yields about 0.7%, but that's a positive feature because that shows the company is not overextending itself by paying an unsustainable dividend. Throughout the last 53 years, no matter what's been happening, Walmart has been able to increase its dividend payout.
Growing revenue streams
In addition to its core operations, Walmart is generating revenue through new segments and services. Its global advertising operations are showing promise, having generated $6.4 billion in revenue in its fiscal 2026 (ended Jan. 31).
It also offers a Walmart+ membership with perks. Those memberships not only bring in revenue directly but can also lead to higher shopping cart totals, as members feel inclined to shop at Walmart to justify the cost of the membership.
Walmart could keep hiking dividends for another 53 years
Barring unforeseen events and unless its pricing power, revenue generation, and net income change drastically, Walmart should be able to continue increasing its dividend payout for years to come.
At this moment, shares do look expensive, based on a forward price-to-earnings ratio of 42.3. Value investors may want to wait for that ratio to drop a bit before considering an investment, but Walmart can meet high expectations.
It offers stability through its pricing power, attracts millions of people online and in person each week, and hauls in billions of dollars in profit by selling essential items. With a reliable dividend payout that is consistently increased, this may be the type of company to consider paying up for in uncertain times.
