- Mexico
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- Food and Staples Retail
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- BMV:WALMEX *
Wal-Mart de México. de's (BMV:WALMEX) Shareholders Will Receive A Bigger Dividend Than Last Year
The board of Wal-Mart de México, S.A.B. de C.V. (BMV:WALMEX) has announced that it will be increasing its dividend by 4.9% on the 22nd of November to Mex$0.85. Based on the announced payment, the dividend yield for the company will be 2.3%, which is fairly typical for the industry.
View our latest analysis for Wal-Mart de México. de
Wal-Mart de México. de's Earnings Easily Cover the Distributions
We like a dividend to be consistent over the long term, so checking whether it is sustainable is important. However, prior to this announcement, Wal-Mart de México. de's dividend was comfortably covered by both cash flow and earnings. This means that most of its earnings are being retained to grow the business.
Over the next year, EPS is forecast to expand by 12.1%. Assuming the dividend continues along recent trends, we think the payout ratio could be 63% by next year, which is in a pretty sustainable range.
Wal-Mart de México. de Has A Solid Track Record
The company has an extended history of paying stable dividends. Since 2012, the dividend has gone from Mex$0.55 to Mex$1.63. This means that it has been growing its distributions at 11% per annum over that time. So, dividends have been growing pretty quickly, and even more impressively, they haven't experienced any notable falls during this period.
The Dividend Has Growth Potential
Some investors will be chomping at the bit to buy some of the company's stock based on its dividend history. Wal-Mart de México. de has seen EPS rising for the last five years, at 9.2% per annum. With a decent amount of growth and a low payout ratio, we think this bodes well for Wal-Mart de México. de's prospects of growing its dividend payments in the future.
We Really Like Wal-Mart de México. de's Dividend
Overall, a dividend increase is always good, and we think that Wal-Mart de México. de is a strong income stock thanks to its track record and growing earnings. Distributions are quite easily covered by earnings, which are also being converted to cash flows. Taking this all into consideration, this looks like it could be a good dividend opportunity.
Market movements attest to how highly valued a consistent dividend policy is compared to one which is more unpredictable. Still, investors need to consider a host of other factors, apart from dividend payments, when analysing a company. Earnings growth generally bodes well for the future value of company dividend payments. See if the 12 Wal-Mart de México. de analysts we track are forecasting continued growth with our free report on analyst estimates for the company. Is Wal-Mart de México. de not quite the opportunity you were looking for? Why not check out our selection of top dividend stocks.
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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.
About BMV:WALMEX *
Wal-Mart de México. de
Owns and operates self-service stores in Mexico and Central America.
Excellent balance sheet with proven track record.