In about four weeks, I'll turn 44 years old.
It's a milestone of sorts, not the least of which is that in six years I'll be 50 years old... in 16 years, I'll be celebrating 60.
I'm also approaching 20 years in the financial publishing business. In that time, I've seen it all...
I was there for the birth of the dot-com bull market. Seven years later I watched it burst in dramatic fashion, wiping out hundreds of billions of dollars in paper wealth.
The dot-com bust ushered in the housing bull market — and we all know how that finished: Not only did it nearly collapse the American economy, but it also pushed global markets to the precipice of the abyss.
At the same time the housing market was entering a bull market in 2001, gold was forming its own bull run... and it's still going to this day.
Bull markets come and go. In the last 20 years, over 1,000 publicly-traded companies have gone bust. Fortunes have been lost, dreams shattered, retirements delayed.
And this will continue to be the norm, because that's what the market does: It rewards good ideas and great execution; it punishes bad ideas and inefficient management — and it does so without a jaundiced eye.
In all of the time I've been learning about investing, there's been one constant in the stock market. It's been the most reliable way to make consistent money, year over year over year...
And that's Wal-Mart.
Consider this: Twenty years ago (1993) in my home state of Maryland, there were only seven Wal-Mart stores. (The first year a Wal-Mart appeared in Maryland was in 1992!)
Today there are 28 Wal-Mart stores and 17 Supercenters.
The first recorded annual report for Wal-Mart was in 1968. For that year it did over $12.6 million in sales with 24 stores operating in Arkansas and Missouri.
By the time Sam Walton took Wal-Mart public (to raise capital for his rapid expansion plans), there were over 51 Wal-Mart stores doing $78 million in sales per year.
In 1974 Wal-Mart paid its first dividend to shareholders: $0.05 a share.
(Remember this number, because this is before all the stock splits Wal-Mart has done throughout the years.)
Just six years later in 1980, Wal-Mart hit the $1 billion in annual sales mark. In 1980 it had 276 stores, mainly in the Midwest, but the company was growing like a weed on steroids-manure...
To give you a for-instance, here's a 20-year table of Wal-Mart stores from 1976 to 1996:
|No. stores: 125
Today the giant retailer boasts over 10,000 stores the world over...
And there are no signs of its growth slowing down. In Maryland, WMT is still building new stores!
Now, here's where it gets really interesting from an investment perspective...
Remember that very first dividend Wal-Mart started paying in 1974? An annual payment of $0.05 per share.
At the time, Wal-Mart only had 6,500,000 shares outstanding. If you held Wal-Mart stock in your portfolio back then, you would have made only $5 a year on their dividends if you owned 100 shares; if you owned 1,000 shares, you would've made $50...
Since then, WMT's stock has split so many times that they now have 3,360,000,000 (3.36 billion) shares outstanding — an increase of roughly 516x their original number of shares.
That means if you initially owned 1,000 shares of Wal-Mart in 1974 — and you held on to it through to today — you would have 516,923 shares, more or less.
So if you recalculate the 1974 dividend based on the current shares out, your 1974 dividend comes to $0.00009 per share.
Wal-Mart's current trailing 12-month dividend payment was $1.59 per share held — meaning if you initially owned 1,000 shares of Wal-Mart in 1974, you would have recently received a dividend payment of $821,907.57.
Now, are you ready for this?
Since its very first dividend payment back in 1974, Wal-Mart has increased its dividend payment by about 1.7 million percent!
This is pure arithmetic. And I'm not even figuring in DRIPs, nor am I considering the capital appreciation in Wal-Mart stock.
I've recalculated these figures half a dozen times to verify its accuracy. I've even had my staff verify my findings. They're pretty spot-on.
Wal-Mart's stock traded for an average of about $17/share throughout 1974 when it paid its first dividend. But because of all of the stock splits, that $17/share is really $0.02/share, based on today's shares outstanding of 3.36 billion shares.
So not only would you have made 1.7 million percent in dividends had you purchased Wal-Mart stock in 1974... but your common shares would've appreciated 375,490%.
Wal-Mart is so profitable — and is growing in such volume at such a rapid pace — that it has spawned cottage and niche investment industries that make money off of the retail king's success...
In other words, you don't even need to own shares of WMT to enjoy and profit from its success.
Oh, and by the way... Wal-Mart's stock just hit a record all-time high the week before last.
Brian Hicks Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Wealth Daily and Energy & Capital. Known as the "original bull on America," Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor's page.
Brian is a founding member and President of Angel Publishing and investment director for the income and dividend newsletter The Wealth Advisory. He writes about general investment strategies for Wealth Daily and Energy & Capital. Known as the "original bull on America," Brian is also the author of the 2008 book, Profit from the Peak: The End of Oil and the Greatest Investment Event of the Century. In addition to writing about the economy, investments and politics, Brian is also a frequent guest on CNBC, Bloomberg, Fox and countless radio shows. For more on Brian, take a look at his editor's page.