This Dividend King Is on Track to Join the $1 Trillion Club. Is It a Buy?

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This Dividend King Is on Track to Join the Trillion Club. Is It a Buy?


There are currently eight publicly traded companies with market caps of $1 trillion or more: Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta Platforms, Tesla, and Berkshire Hathaway.

Those stocks are highly renowned, and for good reason: They have made plenty of investors wealthy. However, none of them are particularly known as dividend stocks, and thus far the trillion-dollar club has excluded longtime dividend payers. However, that could soon change.

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Walmart (NYSE: WMT), the world’s biggest retailer and the largest company in the world by revenue, has quietly blown away the rest of the retail sector in recent years as its commitment to omnichannel sales and reputation for everyday low prices have delivered steady growth. Meanwhile, many of its peers have struggled with inflation and weak consumer spending.

Walmart reported another round of strong quarterly results on Tuesday morning. Top-line growth was strong across the board with comparable-store sales (comps) up 5.3% at U.S. stores (excluding fuel), its best performance in at least five quarters. And Sam’s Club, its members-only warehouse retail chain, reported 7% comps growth excluding fuel.

At its international segment, which has historically been a challenging segment for the company, constant-currency revenue rose 12.4% to $30.3 billion. Overall, revenue was up 5.5% to $169.6 billion, which topped the consensus at $166.6 billion.

The retailer also delivered solid margin improvement, with gross margin increasing 21 basis points to 24.2%, driven by lower markdowns in U.S. stores and strong inventory management. Overall operating margin expanded as well, as operating income was up 8.2% to $6.7 billion. Adjusted earnings per share (EPS) rose from $0.51 to $0.58, ahead of the consensus at $0.53.

Walmart’s stores performed well, but it’s also benefiting from emerging growth businesses like advertising, where revenue jumped 28%, and global e-commerce remains strong with sales up 27% as it gains market share on Amazon and other competitors.

The company also raised its guidance, showing increased confidence in the holiday quarter. It now expects net sales to rise 4.8% to 5.1% and full-year adjusted EPS of $2.42 to $2.47.

An aisle in a store.
Image source: Getty Image.

Walmart’s market cap topped $700 billion for the first time on Tuesday, Nov. 19, meaning the company is approaching a $1 trillion market cap. At its current valuation, the stock would only have to grow by 43%, which seems achievable given its recent momentum. The stock is now up 66% year to date, though it will be difficult to repeat that performance next year.



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