Wal-Mart Is Doing The 'Bare Minimum' To Remain A 'Dividend Aristocrat,' According To This Bloomberg Report

Wal-Mart Stores, Inc. (NYSE: WMT) may be undergoing a turnaround, which is attracting investor attention. However, dividend-focused investors may now be shying away from the stock.

According to Bloomberg Gadfly's Shelly Banjo, the aggregate amount of cash Wal-Mart distributed to investors in the form of dividends actually fell by 1.1 percent in the second quarter compared to a year ago. In fact, this marks only the third time in history this has happened, with the other two occurring in the first quarter of this year and the first quarter of 2014.

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Banjo noted that Wal-Mart is a member of the "dividend aristocrats" — companies that have boosted their dividend payments every year for at least 25 consecutive years. Long-term dividend-focused investors love a stock like Wal-Mart, as the company has actually increased its dividend for 43 straight years and is showing no signs of stopping.

However, Banjo stated that Wal-Mart is merely doing "the bare minimum" to "cling to the aristocracy." She pointed out that Wal-Mart's dividend payout was raised by just one penny in each of the past three years, marking a change of policy after years of "steep" increases.

Moreover, since Wal-Mart has also instituted a share buyback program, there are now 18 percent fewer shares on the market since 2010, which explains why the total payout to all investors has actually shrunk.

On the other hand, Wal-Mart's dividend yield of around 2.7 percent is still superior to the S&P 500's average of 2.1 percent and looks even more attractive compared to the 10-year note yield of around 1.5 percent.

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