Witness an Artificial Intelligence (AI) Corporation Exhibiting Dividend Increment for Over Fifty Continuous Years

Witness an Artificial Intelligence (AI) Corporation Exhibiting Dividend Increment for Over Fifty Continuous Years

Investors searching for dividend returns might find little appeal in most AI-related stocks. While giants like Apple, Meta Platforms, Microsoft, and Nvidia do provide dividends, their yields are minimal, usually below 1%.

IBM serves as a notable exception, boasting a forward dividend yield surpassing 3.9%. However, its stock performance has underperformed the S&P 500 substantially during the past few years, with a decline in value since 2014.

Is there an AI-driven stock suitable for dividend investors? It's possible. Meet a stock that has boosted its dividend for more than 50 consecutive years.

Retail titan, dividend aristocrat

Chances are, you're already acquainted with Walmart (WMT -1.24%). This corporation is recognized as the world's largest retailer by retail sales revenue. Walmart operates over 10,500 stores and e-commerce websites in 19 nations.

During its fiscal year 2024 (which ended Jan. 31, 2024), Walmart amassed a total revenue exceeding $648 billion and reported a profit of $15.5 billion. During its latest fiscal year, the retail giant allocated $6.1 billion towards dividend payments.

In terms of rewarding shareholders with dividend payments, Walmart has a longstanding tradition. They have maintained a record of increasing their dividends for 51 consecutive years, landing them a place in the renowned group known as Dividend Kings. Recently, Walmart even raised its dividend payout by 9%.

Notably, Walmart's stock performance has outpaced the S&P 500 during the past one-year, three-year, and five-year periods.

But is Walmart an AI stock?

Some might be wondering, "Yes, Walmart is a dividend stock, but is it an AI stock?" It might come as a surprise to learn that the answer is an affirmative "yes."

Walmart isn't considered an AI stock simply because it uses AI. In fact, it does employ AI across various operations. However, if a company merely utilizing AI was enough to qualify as an AI stock, many other prominent companies might make the list.

So what should prerequisites be for legitimately including a company in the AI stock category? I believe a company should develop and market AI-associated technology or AI-converting technology which the mentioned companies, such as Apple, Meta, Microsoft, Nvidia, and IBM, clearly accomplish. Walmart too fits the criteria.

In March 2024, Walmart Commerce Technologies (Walmart's technology solutions-selling unit) introduced an AI-driven route optimization software application. This application improved Walmart's internal trucking operations by cutting down on miles driven and is now being offered to other businesses. Since Walmart now develops and markets AI-harnessing technology, it falls into the AI stock category in my eyes.

Is Walmart a suitable AI alternative for dividend investors?

Some investors might find Walmart's forward dividend yield of 1.28% underwhelming. Nevertheless, its stock may be appealing to those searching for a solid AI connection and a dividend payout that isn't painfully low (for instance, Nvidia's yield is a mere fraction of 1%).

Walmart is durable, remaining strong through economic downturns. It has been a lucrative choice for investors long-term and in recent years. Moreover, I believe the company is poised to benefit significantly from AI by enhancing the efficiency of its operations.

Walmart's use of AI in its internal operations, specifically the introduction of an AI-driven route optimization software to improve its trucking operations, makes it an AI stock according to some criteria. This expansion into AI technology could potentially appeal to investors seeking a solid AI connection in addition to a dividend payout, despite Walmart's forward dividend yield of 1.28% being lower than some other tech giants.

Given Walmart's strong performance during economic downturns, history of long-term profitability, and potential benefits from AI, it could be a suitable alternative for dividend investors seeking an AI exposure with a modest yield.

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