Among traditional retailers, Wal-Mart (NYSE: WMT) remains the giant of the industry. Having established its leadership role by offering the widest possible assortment of merchandise at competitively low prices, Wal-Mart has built up one of the largest workforces in the world and commands an extensive network of stores and distribution centers.
Wal-Mart's success has been profitable for its shareholders as well, with the stock having hit new record highs during 2017. When the share price briefly moved above the $100 per mark in November, some investors started to speculate about whether the company would do something it hasn't done since before the turn of the millennium: split its stock. Wal-Mart now seems to have recovered from a long slump in the retail industry, and that could bode well for those looking for further share-price gains. Let's look more closely at Wal-Mart to see whether a stock split might be in the cards for 2018.
Image source: Wal-Mart.
When has Wal-Mart split its stock?
As you can see below, after having made stock splits part of its corporate culture for nearly 30 years, Wal-Mart has gone through an almost 20-year drought of choosing not to make any moves on the stock split front.
| Record Date of Split | Split Ratio | 100 shares in 1970 would now be: |
|---|---|---|
| May 19, 1971 | 2-for-1 | 200 shares |
| March 22, 1972 | 2-for-1 | 400 shares |
| Aug. 19, 1975 | 2-for-1 | 800 shares |
| Nov. 25, 1980 | 2-for-1 | 1,600 shares |
| June 21, 1982 | 2-for-1 | 3,200 shares |
| June 20, 1983 | 2-for-1 | 6,400 shares |
| Sept. 3, 1985 | 2-for-1 | 12,800 shares |
| June 19, 1987 | 2-for-1 | 25,600 shares |
| June 15, 1990 | 2-for-1 | 51,200 shares |
| Feb. 2, 1993 | 2-for-1 | 102,400 shares |
| March 19, 1999 | 2-for-1 | 204,800 shares |
Data source: Wal-Mart investor relations.
Looking back at Wal-Mart's split history, you can see the record of consistency. Splits tended to come every few years at fairly predictable intervals, and the retailer always chose to do standard 2-for-1 splits rather than using different ratios.
However, a closer look reveals some unusual aspects to Wal-Mart's behavior in deciding when to do stock splits. For instance, Wal-Mart's first two splits in the early 1970s came when the stock traded just below $50 per share, a fairly low number compared to its peers at the time. The 1975 split came at just $23 per share, which was nearly unheard of as a trigger point for making such a move. Throughout most of its history, Wal-Mart was comfortable doing splits when the stock price rose into the range of $50 to $70 per share, and only the most recent move in 1999 came after the shares had risen into triple-digit territory briefly.