Dividend investors don’t typically look to retail for big yield. And as such, they might think Wal-Mart (NYSE:WMT) is doing right by shareholders with its headline yield of 2.3%. But the $1.46 in annual dividends is just 29% of projected 2012 earnings, which should top $4.54 a share.
Yes, Wal-Mart has had its troubles — horrible same-store sales stringing back many quarters and the rise of discounters like Dollar General (NYSE:DG) that are eating its lunch. But with more than $400 billion in annual revenue and an entrenched position in the retail industry that allows it to push around vendors for small margins, it’s not like profits are at risk of dropping dramatically.
Even if WMT just treads water, the very least it can do is increase its dividend to deliver a bigger share of profits to shareholders.
Jeff Reeves is the editor of InvestorPlace.com. Write him at firstname.lastname@example.org, follow him on Twitter via @JeffReevesIP and become a fan of InvestorPlace on Facebook. As of this writing, he did not own a position in any of the aforementioned stocks.