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Fri. Jun. 12, 2009

Wal-Mart Has Gone Shopping *

What do you do when the economy tanks and the stock market follows suit, but you are still generating a lot of cash? Many people would look for bargains in the market. Wal-Mart (WMT) [analysis] has done just that.

On June 5th, WMT announced a new share repurchase program that gives the company authorization to repurchase $15 billion of its shares. The new plan replaces the previous $15 billion program, which was announced June 1, 2007 and had approximately $3.4 billion of remaining authorization.

CEO Mike Duke said, “We remain committed to returning value to our shareholders through share repurchase and dividends.” In the last five years Wal-Mart has repurchased approximately $21 billion worth of its shares, Duke said. In addition, WMT raised its dividend in 2009 by 15% to $1.09/share.

Below are some companies rewarding their shareholders with increasing cash dividends:

  • VSE Corporation (VSEC) increased its dividend to $0.20/share annually, yielding 0.76%
  • Oil-Dri Corporation (ODC) raised its dividend 7% to $0.15/share, yielding 3.00%
  • Florida Public Utilities (FPU) bumped its quarterly dividend 2.1% to $0.12/share, yielding 3.71%
  • C. R. Bard (BCR) boosted its quarterly dividend 6% to $0.17/share, yielding 0.93%
  • Clorox (CLX) increased its  dividend 8.7% to $0.50/share, yielding 3.73% – Analysis
  • Target (TGT) raised its quarterly dividend 6% to $0.17/share, yielding 1.72%
  • National Fuel Gas (NFG) bumped its quarterly dividend by 3.1% to $0.335/share, yielding 3.76%

One sign of confident and competent management is willingness and ability to raise their company’s dividend during a severe economic downturn. For companies with a long string of consecutive dividend increases, see this list.

Full Disclosure: Long WMT, CLX.  See a list of all my income holdings here.

(Photo Credit)

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  1. Carnival of Financial Planning - Edition #95 - June 27, 2009 | Good Financial Cents -Jeff Rose Certified Financial Planner and Investment Advisor, Carbondale, Illinois