Already the world's biggest retailer,Wal-Mart Stores (
WMT
), is looking to put even more pressure on its competitors.
Last week, the company said it started testing same-day
delivery for online purchases in select markets, putting itself
in direct competition with e-tailing giantAmazon.com (
AMZN
).
Customers in Wal-Mart's test markets can choose from as many
as 5,000 items, ranging from TVs, toys and sporting goods, and
get them the same day for a flat rate of $10. Instead of using
distribution centers, orders will be shipped out of Wal-Mart
stores and will be delivered byUPS (
UPS
).
Earlier this month, Wal-Mart started testing the same-day
service in northern Virginia and Philadelphia. Last week, it
added Minneapolis and will soon bring the service to San
Francisco and San Jose.
The company also recently announced plans to expand openings
of its smaller Neighborhood Market grocery-format stores in order
to better compete with dollar stores, drugstores and traditional
supermarkets. Wal-Mart plans to add 95 to 115 Neighborhood
Markets next year and have 500 by fiscal 2016. It currently has
about 217 locations.
Wal-Mart has delivered single-to-double-digit earnings and
sales growth each year since at least fiscal 1995. Its three-year
Earnings Stability Factor of 1 on a scale of zero (most stable)
to 99 (most volatile) indicates an extremely steady stream of
profits.
In August the retailer beat expectations with a 5% rise in
fiscal Q2 2013 earnings and raised its full-year profit outlook.
Analysts polled by Thomson Reuters see profit rising 6% to $4.93
a share.
Wal-Mart is a member of the S&P 500 Dividend Aristocrats
index, which tracks big-cap stocks that have paid rising
dividends for at least 25 years. Wal-Mart has done even better as
it has delivered higher shareholder payouts each year since 1974,
four years after going public.
In March, Wal-Mart's board approved an annual dividend of
$1.59 a share for fiscal 2013, up about 9% from the prior year.
Its payout has more than doubled since fiscal 2007. This
translates into an annualized yield of 2.1%.