Up 97% in 2 years, Is Walmart a No-Brainer Dividend King Stock to Buy Now?

Core Insights - Walmart's stock has nearly doubled in the last two years, outperforming the S&P 500 which gained 43.3% [1] - The company has raised its dividend by 13%, marking the 52nd consecutive year of dividend increases, placing it among the "Dividend Kings" [1] Financial Performance - Walmart's fiscal 2026 guidance indicates a sales increase of only 3% to 4% year-over-year, with adjusted operating income growth expected at 3.5% to 5.5% [5] - Adjusted earnings per share (EPS) for fiscal 2026 is projected to be between $2.50 and $2.60, slightly above the $2.51 in fiscal 2025 [5] Market Position and Challenges - The company has improved its supply chain to mitigate tariff impacts, with over two-thirds of U.S. sales sourced domestically [4] - Despite these improvements, Walmart's CEO acknowledged that the company cannot absorb all tariff-related costs, indicating potential price increases [4] - The current forward price-to-earnings (P/E) ratio is 38.5, significantly higher than Walmart's 10-year median P/E of 27.4, raising concerns about valuation sustainability [8][9] Dividend Yield Comparison - Walmart's current dividend yield is 1%, lower than the S&P 500 average of 1.3%, despite its strong dividend history [10] - Other Dividend Kings like Procter & Gamble, Coca-Cola, and PepsiCo offer higher yields of 2.6%, 2.8%, and 4.4% respectively, with lower valuations [11] Investment Considerations - The slowing growth and high valuation may deter investors, especially when compared to other companies with better growth prospects and lower valuations, such as Microsoft [12][13] - While Walmart remains a reliable business, the current investment landscape suggests that alternatives may offer better value for investors [12][13]