Walmart has undergone 12 stock splits since its initial public offering (IPO), with the majority of them being 2-for-1 splits. However, an exception to this pattern occurred in February with a 3-for-1 split.
During each 2-for-1 split, existing shareholders saw their share count double, and this number tripled during the February split. Consequently, a single share would have turned into 6,144 shares.
The unadjusted split price stood at $16.50. As the share count increased, the price per share decreased proportionally. This resulted in the split-adjusted price dropping to $0.0027, significantly below a penny per share. Despite this adjustment, Walmart’s stock closed at a robust $94.25 on December 13, delivering substantial gains for long-term investors.
Shareholders also benefitted from consistent dividend payouts spanning over half a century. Walmart initiated its first quarterly dividend in March 1974, gradually raising it annually. This impressive track record has solidified the company’s status as a Dividend King.
In its most recent move, Walmart raised its quarterly dividend in February to $0.2075 per share, marking a more than 9% increase from the previous year’s split-adjusted $0.19.
Walmart’s straightforward business strategy, centered on cost efficiency and passing savings to consumers, has resonated strongly in the retail industry. This approach has translated into significant profitability for the company and attractive returns for its shareholders. With its competitive everyday pricing, Walmart maintains a strong position in the market, providing enduring value for patient investors.
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By acting on these recommendations at the right time, investors could have seen substantial returns, underscoring the value of staying informed and seizing opportunities as they arise.
Lawrence Rothman, CFA, does not hold positions in the stocks discussed. The Motley Fool endorses and holds positions in Walmart, abiding by a transparent disclosure policy.
