The Wal-Mart logo is pictured on cash registers at a new store in Chicago, January 24, 2012. Credit: Reuters/John Gress
(Reuters) – Wal-Mart Stores Inc raised its annual dividend by nearly 9 percent on Thursday, as momentum in the company’s key Walmart U.S. chain has rebounded.
The world’s largest retailer said that its board approved a dividend of $1.59 per share in fiscal 2013, which ends next January, up from $1.46 last year. That equates to paying about $5.52 billion to shareholders.
Wal-Mart has also been a big buyer of its shares. It announced a $15 billion share repurchase plan in June.
Last year, Wal-Mart raised its dividend by 20.6 percent.
Wal-Mart has high expectations for the current fiscal year, with the core Walmart U.S. business “back on track,” Chief Executive Mike Duke said in a statement.
Shares of Wal-Mart, a component of the Dow Jones industrial average, rose to $59.63 in premarket trading after closing at $59.08 on Wednesday.
The dividend increase would bring Wal-Mart’s dividend yield up to 2.69 percent based on Wednesday’s closing price of $59.08 on the New York Stock Exchange.
While that keeps it among the middle of the pack of the 30 components of the Dow Jones industrial average, it would continue to outpace yields of some other major U.S. retailers. Target Corp’s dividend yields 2.12 percent, and Macy’s Inc’s yields 2.1 percent.
Walmart U.S. posted its second straight rise in quarterly same-store sales last week, and traffic in the stores rose for the first time after six quarterly declines.
Wal-Mart’s international business is still growing and the Sam’s Club warehouse chain has also done well. Still, Wal-Mart continues to invest in areas such as e-commerce, where it trails
market leader Amazon.com Inc, and needs to cut costs to keep its prices low in the United States.
Wal-Mart has raised its dividend every year since it first declared a dividend of 5 cents per share in 1974.
The dividend will be paid in quarterly installments of 39.75 cents per share, with the first payment on April 4 to shareholders of record as of March 12.
Wal-Mart said that it returned $11.3 billion to shareholders through dividends and share buybacks last year.
(Reporting by Jessica Wohl in Chicago; Editing by Gerald E. McCormick, Dave Zimmerman)
