Price increase or decline usually stands out when looking at a company's stock. Stock price is the simplest indication, but it doesn't provide the whole story. Because it accounts for capital appreciation (or depreciation) and dividends, a stock's total return provides a more full picture of its performance. Dividends reward patience and loyalty regardless of stock price increase or depreciation.
1. Lowes Home Depot, the world's largest home improvement retailer, outranks Lowe's Companies (NYSE: LOW). One of the world's top 100 most valuable firms, its market valuation is above $130 billion. Lowe's stock has performed well despite its poor fiscal 2023 (ending Feb. 2, 2024) performance. A decrease in DIY demand drove sales down 4.7% year over year.
Though Lowe's spent $6.3 billion on stock buybacks (29.9 million shares) last year, it appears to be playing the long game. Despite lower net sales, the company's EPS rose to $1.77 from $1.58.
Lowe pays $1.10 per share in quarterly dividends, or little about 2% over 12 months. Although not high, the dividend yield is above the S&P 500 average. Most crucially for long-term investors, Lowe's has increased its dividend for 51 years, making it a Dividend King. Lowe's dividend has doubled in five years.
2. Coke Coke (NYSE: KO) requires no introduction. Coca-Cola is a globally recognized brand distributed in over 200 countries. Don't underestimate Coca-Cola's distribution and profitability. Recent sales slowdowns have hurt Coca-Cola. Coca-Cola raising prices drove organic sales up 16% and 12% in 2022 and 2023. Sales volume only climbed 5% and 2% in those years, but Coca-Cola's pricing strength shows.
Coca-Cola, another Dividend King, has raised its dividend for 62 years. The stock yields 3.3% and pays a $0.485 quarterly dividend. Coke has been a blue chip stock for a while for a reason. With its dividend, broad distribution network, and price power during weak sales seasons, it helps shareholders. But more amazingly, it hasn't become complacent despite leading the sector.
Coca-Cola has invested in ready-to-go alcohol and other developing categories including plant-based drinks to broaden its range and meet consumer preferences. That almost guarantees its long-term leadership.
3. Walmart Walmart (NYSE: WMT) has long been America's largest private employer. This is due to the company's 5,000 U.S. locations (including Sam's Clubs) and 1.6 million employees. Walmart generates revenue like no other company. Walmart earned $648.1 billion in fiscal 2024, up 6%. Last fiscal year, second-place Amazon earned slightly under $575 billion. Walmart generates cash virtually always.
Walmart's outstanding financials are driven by its brick-and-mortar stores, but its rise in e-commerce and advertising will be crucial. worldwide e-commerce revenues rose 23% in the last quarter, and worldwide advertising surged 33% in the fiscal year.
Walmart is another Dividend King; notice the pattern? It raised its dividend for the 51st year in February. The company's financial strength was shown by its 9% gain, its greatest in over a decade.
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