Walmart (NYSE:WMT) will split its stock 3-for-1 after trading ends today, with shares trading at a split-adjusted price on Feb. 26. WMT stock last split, 2-for-1, in 1999.
If you have 100 Walmart shares today, you will have 300 on Monday. A share is worth $176.50 as trading opens this morning and will likely open at about $59 on Feb. 26. The market capitalization is $475 billion.
WMT stock is up 11% so far in 2024 and up 21% over the last year. The split will result in Walmart having 8.1 billion shares. Over the last five years, Walmart is up 76%, while the S&P 500 is up 82%.
Why Split?
In announcing the split last month, CEO Doug McMillon wrote that founder Sam Walton wanted his associates to be able to buy full shares of stock. Walmart offers employees a 15% match on the first $1,800 they invest in the company’s stock each year.
The move will reduce the weight of the stock in the S&P 500, which is a price-weighted average.
Under McMillon, Walmart has tried to compete more directly with Amazon (NASDAQ:AMZN), adding pick-up and delivery options, as well as a membership service called Walmart+.
That competition is expanding with its pending acquisition of TV maker Vizio, which integrates streaming with its TVs. The company hopes this will strengthen its own advertising business, called Walmart Connect, which grew 22% last year. Walmart hopes to bring in $6 billion next year through its ad program, which currently features TVs in Walmart stores. The company spent $4.1 billion on ads last year.
Despite this, the gap between Walmart and Amazon’s sales continues to narrow. Walmart had sales of $678 billion last year, while Amazon had sales of $575 billion. In the fourth quarter of 2023, Amazon had revenue of $170 billion, and Walmart had revenues of $173.4 billion.
The Walmart heirs are currently worth $267 billion, while Amazon founder Jeff Bezos is worth $195 billion.
WMT Stock: What Happens Next?
Amazon will probably be larger and more profitable than Walmart in 2024. But Walmart will still be a better bellwether on the financial health of the American consumer.
As of this writing, Dana Blankenhorn had LONG positions in AMZN. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
