That’s it? Dividend hike leaves investors wanting more

Under normal circumstances a dividend increase of 9% would be regarded as pretty solid, but Walmart has spoiled its investors in recent years, so when it boosted its annual dividend to $1.59 from $1.46 this week the increase was viewed as puny.

The prevailing wisdom was that Walmart might serve up a substantial increase to compensate investors for a share price that has appreciated at a glacial pace and then proceeded to give back much of its recent gains after fourth quarter earnings fell short of analysts’ estimates. Instead, the board opted for a relatively modest 9% increase, which was the lowest increase in recent years.

“Our free cash flow continues to fund store growth across all our markets, facilitate strategic acquisitions and deliver returns to shareholders through dividends and share repurchase,” said Walmart president and CEO Mike Duke. “We returned $11.3 billion to shareholders through dividends and share repurchase during fiscal 2012.”

Looking ahead, Duke said the company has high expectations for the current 2013 fiscal year.

“Our core Walmart U.S. business is back on track. International remains our strong growth engine and Sam’s Club continues to drive sales momentum. And, we will continue to build our e-commerce capabilities to serve more customers,” Duke said.

Despite those assertions and a growing consensus that economic conditions have begun to improve, the percentage increase was less than in recent years when the dividend was increased by 21% in early 2011, and by 11% and 15% in the two prior years.