The market hands out dividends like cheap perfume—a little scent to cover the stink. Regular income, they call it. I call it a promise, and promises are always suspect. You dig beneath the surface, see if the money’s real, or just smoke and mirrors. A payout today doesn’t guarantee one tomorrow, not in this town.
Two names came across my desk: Walmart (WMT +1.69%) and Macy’s (M +3.52%). Both deal in dividends. Both are looking for a piece of your action. The question isn’t whether they can pay, but whether they’re worth the risk.
Walmart
Walmart. It’s everywhere. A concrete ocean of low prices and endless aisles. They serve more customers in a week than some countries have citizens. It’s a machine, humming along, and machines usually deliver. They reported an operating profit of $7.2 billion last quarter—a number that could keep a small country afloat.
They’re not just hoarding cash, either. They’re reinvesting, expanding. And still managing to toss a few crumbs to shareholders. Free cash flow came in at $8.8 billion for the last nine months—more than enough to cover the $5.6 billion in dividends. They’ve been raising those dividends for over fifty years—a streak that suggests they know something the rest of us don’t.
But a 0.7% yield? That’s barely a whisper. The stock’s been running hard—up 169% over three years, leaving the S&P 500 choking on its dust. You’re paying a premium for that growth, and a small dividend isn’t going to change that.
Macy’s
Macy’s. A name that used to mean something. Now it’s a department store trying to remember what it wants to be. They’ve been fighting a losing battle against the digital tide, but they’ve got a turnaround plan. Revamping stores, changing the merchandise, pushing the luxury brands. It’s a long shot, but sometimes long shots pay off.
They’ve seen a few glimmers of hope. Same-store sales up 3.4% last quarter. Adjusted earnings doubled to $0.09 a share. It’s not a fortune, but it’s a start. A sign that maybe, just maybe, they can steer this ship around.
Free cash flow is at $545.7 million—enough to cover the $200 million in dividends. But they had to slash those dividends back in 2020, when the world went sideways. They’ve been raising them since, but the current yield is a hefty 3.2%. It smells like a trap.
The Verdict
Walmart’s dividend is a polite nod, nothing more. It’s a solid company, but you’re paying for the future, not the income. Macy’s is a gamble. That 3.2% yield is tempting, but it’s built on sand. They’re trying to rebuild, but one bad quarter could send it all crashing down.
For the cautious investor, Walmart offers stability. For the risk-taker, Macy’s is a long shot with a decent payout. But remember this: in this business, there are no sure things. Just calculated risks and the faint hope of a payoff. And sometimes, the best return is avoiding the trouble altogether.
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2026-02-12 15:32