At its current market value, Wal-Mart Stores, Inc. (NYSE:WMT) presents a rather enticing dividend yield of approximately 2.3%, which is why its stock has become more sought-after among income shareholders. The retail corporation holds a track record of shelling out mounting dividends for the past 38 years, and with a rate of roughly 32% in terms of its payout ratio, it is probable that its dividend stream will be more consistent and emergent in the coming years. On Feb. 21, 2013, Wal-Mart is going to declare its fourth quarter and full year earnings, and since the company has long kept the tradition of boosting its shares, market analysts expect that it will maintain its growth and return more capital to its investors.
The company is also planning to make significant improvements concerning its expansion schemes. It will appreciably develop its business units in order to compete with its closest rival, Target Corporation (NYSE:TGT) , in various foreign markets like Canada. Target has recently announced that it is aiming to open around 125 new retail stores in the country above the US. In order to counter this plan, Wal-Mart declared its $454 million worth of expenditures that will aim to increase and develop its presence in the market of Canada. Wal-Mart is proposing to open 37 stores in the country, which will give it 416 stores once this plan flourishes.
Contenders in the Market
Target currently conducts its operations in three segments: US Credit Card, US Retail, and Canadian. The company’s US Credit Card segment provides credit to its clients by means of its credit cards, which are the Target Card and the Target Visa. Its US Retail Segment focuses on the ways in which the company can boost its online and offline presence in order to allow its customers to buy products online or through finding them in a nearby branch with the help of online research. Lastly, its Canadian Segment thrives on account of the company’s acquisition of leasehold interests in the True North.
While Wal-Mart and Target are both established retailers in the industry and have fairly alike cost-structure, Amazon.com, Inc. (NASDAQ:AMZN) is recently providing a good competition as it has lowered the cost of its products and services. Amazon primarily serves its customers through its online stores, and concentrates on the variety, expediency, and price of its products. The largest online retail store’s customer sets consists of enterprises, sellers, customers, and content developers. It provides programs that allow sellers to advertise their products and services on various websites, develop their brand, and complete orders online.
Wal-Mart places itself as a discount retail company, but Amazon is recently attempting to offer similar low rates. In order to emerge and survive the competition successfully, Wal-Mart began new strategies that include same day distribution and upgrading of its presence in the online community, amongst others.