Wal-Mart de México. de's (BMV:WALMEX) Dividend Will Be Increased To Mex$0.82

By
Simply Wall St
Published
November 24, 2021
BMV:WALMEX *
Source: Shutterstock

The board of Wal-Mart de México, S.A.B. de C.V. (BMV:WALMEX) has announced that it will be increasing its dividend on the 28th of December to Mex$0.82. This makes the dividend yield 2.2%, which is above the industry average.

Check out our latest analysis for Wal-Mart de México. de

Wal-Mart de México. de's Payment Has Solid Earnings Coverage

We like to see robust dividend yields, but that doesn't matter if the payment isn't sustainable. However, Wal-Mart de México. de's earnings easily cover the dividend. This means that most of what the business earns is being used to help it grow.

Over the next year, EPS is forecast to expand by 8.5%. If the dividend continues along recent trends, we estimate the payout ratio will be 66%, which is in the range that makes us comfortable with the sustainability of the dividend.

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BMV:WALMEX * Historic Dividend November 24th 2021

Wal-Mart de México. de Has A Solid Track Record

Even over a long history of paying dividends, the company's distributions have been remarkably stable. Since 2011, the dividend has gone from Mex$0.38 to Mex$1.63. This works out to be a compound annual growth rate (CAGR) of approximately 16% a year over that time. It is good to see that there has been strong dividend growth, and that there haven't been any cuts for a long time.

The Dividend Looks Likely To Grow

Investors could be attracted to the stock based on the quality of its payment history. Wal-Mart de México. de has seen EPS rising for the last five years, at 10% per annum. Wal-Mart de México. de definitely has the potential to grow its dividend in the future with earnings on an uptrend and a low payout ratio.

Wal-Mart de México. de Looks Like A Great Dividend Stock

Overall, we think this could be an attractive income stock, and it is only getting better by paying a higher dividend this year. Distributions are quite easily covered by earnings, which are also being converted to cash flows. All in all, this checks a lot of the boxes we look for when choosing an income stock.

It's important to note that companies having a consistent dividend policy will generate greater investor confidence than those having an erratic one. At the same time, there are other factors our readers should be conscious of before pouring capital into a stock. Earnings growth generally bodes well for the future value of company dividend payments. See if the 15 Wal-Mart de México. de analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Looking for more high-yielding dividend ideas? Try our curated list of strong dividend payers.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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Simply Wall St is focused on providing unbiased, high-quality research coverage on every listed company in the world. Our research team consists of data scientists and multiple equity analysts with over two decades worth of financial markets experience between them.