how to buy walmart stock

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Recommended further reading: In a move that is shaking the very foundations of conventional retirement wisdom, the undisputed “King of Retail” is offering a program that, for many retirees, could actually help replace Social Security, 401(k)s, IRAs, pension plans, and the like:

You have to love a company that gushes free cash flow, and uses it to crank up dividends, and buy back undervalued shares.  If I were looking to invest in Walmart (I haven’t yet, but am thinking about it), I’d probably do so via their DRIP plan – which allows you to automatically reinvest your dividends to pick up more shares.  Thus perpetuating the very virtuous cycle that is compound interest in your favor.

Walmart project share repurchases (Source: )

And the retailing powerhouse also is stepping up its share repurchases in a big way – which is a very good thing if you believe, as I do, that the stock is cheap:

Which means that your initial investment will be yielding an astounding 19.01% at the end of 10 years!

But from 2010 to 2011, WMT really stepped it up with a 21% increase – at that rate, it doubles in just over 3 years…

From 2009 to 2010, Walmart increased its dividend by “only” 11%.  At that rate of increase, the dividend payout doubles every 6 years.

WMT paid $0.365 for each share last quarter, which puts its annualized yield at 2.83% – which is more than respectable in today’s low/no yield environment.  But here’s where it gets really interesting.

Walmart trades sideways for years – why would you want to buy this again? (Source: )

Walmart in particular looks to me like a pretty sexy candidate for a DRIP (dividend reinvestment plan).  The stock price has gone nowhere for five years – which is a good thing if you’re a dividend investor, because the payout is that much fatter.

We’ve talked a lot about the former, but not as much about the latter.  While I view the US market on whole as fairly expensive (trading north of 15x earnings), some traditional, hardy stocks are starting to look downright cheap – especially when you account for their dividend…and more importantly, the growth rate of that dividend.

Since I am , I try to avoid them from an investment perspective – I’m already levered up enough.  Instead, I currently prefer to focus (perhaps ironically so) on the bare essentials – agricultural commodities, and consumer staples that pay fat dividends.

One of the main reasons why I hate the stock market at these levels is that nobody is really paying a dividend.  At secular bear market bottoms, you typically see nice fat dividends of 5% or more.  Today you’re hard pressed to find a company that pays more than a point or two.

Buy This Stock Today, And You’ll Be Earning 19% on Initial Capital in Ten Years

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Wal-tirement Plan From Dan Ferris: Investing in Walmart’s Rising Dividends