Advertisement
Canada markets closed
  • S&P/TSX

    21,807.37
    +98.93 (+0.46%)
     
  • S&P 500

    4,967.23
    -43.89 (-0.88%)
     
  • DOW

    37,986.40
    +211.02 (+0.56%)
     
  • CAD/USD

    0.7275
    +0.0012 (+0.16%)
     
  • CRUDE OIL

    83.24
    +0.51 (+0.62%)
     
  • Bitcoin CAD

    89,704.13
    +1,608.88 (+1.83%)
     
  • CMC Crypto 200

    1,396.36
    +83.74 (+6.38%)
     
  • GOLD FUTURES

    2,406.70
    +8.70 (+0.36%)
     
  • RUSSELL 2000

    1,947.66
    +4.70 (+0.24%)
     
  • 10-Yr Bond

    4.6150
    -0.0320 (-0.69%)
     
  • NASDAQ

    15,282.01
    -319.49 (-2.05%)
     
  • VOLATILITY

    18.71
    +0.71 (+3.94%)
     
  • FTSE

    7,895.85
    +18.80 (+0.24%)
     
  • NIKKEI 225

    37,068.35
    -1,011.35 (-2.66%)
     
  • CAD/EUR

    0.6824
    +0.0003 (+0.04%)
     

Walmart Soars on Earnings, Dividend & Vizio Deal: ETFs to Buy

Before the opening bell yesterday, Walmart WMT reported robust fourth-quarter fiscal 2024 results, wherein it surpassed both earnings and revenue estimates. The megaretailer spread strong optimism about the company’s growth prospects by providing a big boost to its annual dividend and unveiling the $2.3 billion takeover of smart TV maker Vizio VZIO.

This has sent WMT shares to a record high. Investors seeking to tap the opportune moment should consider ETFs having the highest allocation to the world's largest brick-and-mortar retailers. These include Fidelity MSCI Consumer Staples Index ETF FSTA, Vanguard Consumer Staples ETF VDC, VanEck Vectors Retail ETF RTH and iShares U.S. Consumer Focused ETF IEDI.

Walmart’s Earnings in Focus

Earnings per share came in at $1.80, outpacing the Zacks Consensus Estimate of $1.65 and improving 5.3% from the year-ago earnings. Revenues rose 5.7% year over year to $173.4 billion and topped the consensus mark of $170.6 billion. U.S. comparable sales grew 4%. Notably, e-commerce sales surged 23%, surpassing the $100 billion annual sales milestone as shoppers turned to the big-box retailer throughout the holiday season (read: 3 Factors to Bet on U.S. Consumer ETFs).

The mega-retailer provided fiscal 2025 guidance. It expects revenues to rise 3-4% from the year-ago level and earnings per share in the range of $6.70-$7.12. For first-quarter fiscal 2025, Walmart expects sales to grow 4-5% and adjusted earnings per share in the range of $1.48-$1.56.

Dividend Boost

Walmart raised its annual cash dividend by 9% to $0.83 per share on a post-stock split basis for fiscal 2025, reflecting confidence in its financial strength. The increase underscores the company's largest dividend boost in more than a decade and the 51st consecutive year of dividend increase.

Vizio Takeover Deal

Walmart agreed to buy a leading smart television manufacturer, Vizio, for $2.3 billion, or $11.50 per share.

This acquisition will significantly bolster Walmart's advertising business and grant it control of a substantial portion of the U.S. television market. The potential deal is seen as a strategic move by Walmart to leverage its vast shopper data and retail network to enhance its advertising capabilities, particularly through its Walmart Connect platform. This platform has shown robust growth, generating approximately $3 billion in sales last year.

Walmart's interest in Vizio aligns with its efforts to expand its retail media network, which has been growing rapidly. By acquiring Vizio, Walmart could potentially command over a fifth of the television market in the United States. This move could also enable Walmart to offer more advertising opportunities to consumer packaged goods companies across its network of 5,000 stores, visited by 130 million shoppers weekly.

Below, we have detailed the ETFs:

Fidelity MSCI Consumer Staples Index ETF (FSTA)

Fidelity MSCI Consumer Staples Index ETF offers broad exposure to the consumer staples sector by tracking the MSCI USA IMI Consumer Staples Index and holds 109 stocks in its basket. Of these, Walmart takes the fourth spot with a 7.8% share. Fidelity MSCI Consumer Staples Index ETF has amassed $1 billion in its asset base while trading in a good volume of around 130,000 shares a day, on average. FSTA charges 8 bps in annual fees from investors and has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook (see: all Consumer Staples ETFs here).

Vanguard Consumer Staples ETF (VDC)

Vanguard Consumer Staples ETF also targets the broad consumer staples space by tracking the MSCI US Investable Market Consumer Staples 25/50 Index. It holds 104 stocks in its basket, with Walmart occupying the fourth position, having a 7.9% allocation. Vanguard Consumer Staples ETF manages a $6.3 billion asset base and charges a fee of 10 bps per year. VDC trades in a good average volume of around 124,000 shares per day and has a Zacks ETF Rank #3 with a Medium risk outlook.

VanEck Vectors Retail ETF (RTH)

VanEck Vectors Retail ETF provides exposure to the 26 largest retail firms by tracking the MVIS US Listed Retail 25 Index, which measures the performance of the companies involved in retail distribution, wholesalers, online, direct mail and TV retailers, multi-line retailers, specialty retailers and food and other staples retailers. Walmart takes the fourth spot with a 7.5% share. VanEck Vectors Retail ETF has amassed $182.8 million in its asset base and charges 35 bps in annual fees. It trades in a lower volume of 6,000 shares a day on average. VanEck Vectors Retail ETF has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook (read: 4 ETF Areas to Play Despite Soft January Retail Sales).

iShares U.S. Consumer Focused ETF (IEDI)

iShares U.S. Consumer Focused ETF is an actively managed ETF providing exposure to U.S. companies with a focus on U.S. consumer spending and consumer goods. It holds 185 stocks in its basket, with Walmart occupying the fourth position at 5.3% share. iShares U.S. Consumer Focused ETF has accumulated $16.4 million in its asset base and charges 18 bps in fees per year. Volume is paltry for IEDI as it exchanges 3,000 shares a day, on average.

ADVERTISEMENT

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Walmart Inc. (WMT) : Free Stock Analysis Report

VanEck Retail ETF (RTH): ETF Research Reports

Vanguard Consumer Staples ETF (VDC): ETF Research Reports

Fidelity MSCI Consumer Staples Index ETF (FSTA): ETF Research Reports

iShares U.S. Consumer Focused ETF (IEDI): ETF Research Reports

VIZIO Holding Corp. (VZIO) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research