Wal - Mart de Mexico SAB de CV's Dividend Analysis
Assessing the Sustainability and Growth of Wal - Mart de Mexico SAB de CV's Dividend
Wal - Mart de Mexico SAB de CV (WMMVY) recently announced a dividend of $0.56 per share, payable on 2023-12-18, with the ex-dividend date set for 2023-12-04. As investors look forward to this upcoming payment, the spotlight also shines on the company's dividend history, yield, and growth rates. Using the data from GuruFocus, let's look into Wal - Mart de Mexico SAB de CV's dividend performance and assess its sustainability.
Company Overview
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Wal - Mart de Mexico SAB de CV is the owner and operator of Wal-Mart branded self-service stores in Mexico and Central America. Wal-Mart de Mexico is a subsidiary of Wal-Mart Stores Incorporated, based in the United States. The company generates the majority of revenue in Mexico and a small proportion of revenue from the rest of Central America. The company operates discount stores, hypermarkets, supermarkets, wholesale stores, and pharmacies. The company also engages in the import and sale of goods, property development, and real estate management activities.
Dividend History
Wal - Mart de Mexico SAB de CV has maintained a consistent dividend payment record since 2001. Dividends are currently distributed on a bi-annual basis. Below is a chart showing annual Dividends Per Share for tracking historical trends.
Dividend Yield and Growth Rates
As of today, Wal - Mart de Mexico SAB de CV currently has a 12-month trailing dividend yield of 2.13% and a 12-month forward dividend yield of 4.87%. This suggests an expectation of increased dividend payments over the next 12 months.
Wal - Mart de Mexico SAB de CV's dividend yield of 2.13% is near a 10-year high and outperforms 37.62% of global competitors in the Retail - Defensive industry, suggesting that the company's dividend yield stands out as an attractive proposition for income investors.
Over the past three years, Wal - Mart de Mexico SAB de CV's annual dividend growth rate was 12.10%. Extended to a five-year horizon, this rate decreased to 11.30% per year. And over the past decade, Wal - Mart de Mexico SAB de CV's annual dividends per share growth rate stands at an impressive 10.10%.
Based on Wal - Mart de Mexico SAB de CV's dividend yield and five-year growth rate, the 5-year yield on cost of Wal - Mart de Mexico SAB de CV stock as of today is approximately 3.64%.
Assessing Dividend Sustainability
To assess the sustainability of the dividend, one needs to evaluate the company's payout ratio. The dividend payout ratio provides insights into the portion of earnings the company distributes as dividends. A lower ratio suggests that the company retains a significant part of its earnings, thereby ensuring the availability of funds for future growth and unexpected downturns. As of 2023-09-30, Wal - Mart de Mexico SAB de CV's dividend payout ratio is 0.83, which may suggest that the company's dividend may not be sustainable.
Wal - Mart de Mexico SAB de CV's profitability rank, offers an understanding of the company's earnings prowess relative to its peers. GuruFocus ranks Wal - Mart de Mexico SAB de CV's profitability 9 out of 10 as of 2023-09-30, suggesting good profitability prospects. The company has reported positive net income for each year over the past decade, further solidifying its high profitability.
Future Growth Prospects
To ensure the sustainability of dividends, a company must have robust growth metrics. Wal - Mart de Mexico SAB de CV's growth rank of 9 out of 10 suggests that the company's growth trajectory is good relative to its competitors.
Revenue is the lifeblood of any company, and Wal - Mart de Mexico SAB de CV's revenue per share, combined with the 3-year revenue growth rate, indicates a strong revenue model. Wal - Mart de Mexico SAB de CV's revenue has increased by approximately 8.20% per year on average, a rate that outperforms approximately 62.98% of global competitors.
The company's 3-year EPS growth rate showcases its capability to grow its earnings, a critical component for sustaining dividends in the long run. During the past three years, Wal - Mart de Mexico SAB de CV's earnings increased by approximately 8.90% per year on average, a rate that outperforms approximately 41.2% of global competitors.
Lastly, the company's 5-year EBITDA growth rate of 7.40%, which outperforms approximately 37.71% of global competitors.
Conclusion and Next Steps for Investors
Wal - Mart de Mexico SAB de CV's dividend payments, growth rate, payout ratio, profitability, and growth metrics present a mixed picture for investors. While the company boasts a strong dividend history and above-average profitability and growth ranks, the current payout ratio may raise concerns about the long-term sustainability of its dividend payments. Investors should weigh these factors carefully, considering both the opportunities for income and the need for ongoing assessment of the company's financial health.
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This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
This article first appeared on GuruFocus.
