Why Is Walmart Splitting Its Stock?
The world's largest retailer's 3-for-1 stock split greatly cuts WMT's weight in the Dow.


If you're a long-time shareholder in Walmart (WMT) stock wondering why the world's largest retailer effected a three-for-one stock split near the end of February, well, the move wasn't for you. It was for Walmart's employees.
After all, investors don't need stock splits anymore – not in a world where they can buy fractional shares for free on their smartphones. But Walmart, like a lot of companies, has a program where its employees can buy shares through payroll deductions. The issue? WMT's price was getting a little too rich for the program to work as intended.
After rising almost 18% on a price basis over the past 52 weeks, Walmart stock is trading at record levels. Indeed, at about $174 a pop, WMT stock stands 20% above its three-year average price of $145. Regrettably, the stock's high-flying ways put it out of reach for some.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
"[Founder] Sam Walton believed it was important to keep our share price in a range where purchasing whole shares, rather than fractions, was accessible to all of our associates," said Walmart CEO Doug McMillon in a press release.
The solution? A three-for-one stock split ahead of the open on February 26. Recall that as much as the market likes stock splits, they're essentially immaterial. Nothing about a company's fundamentals or outlook changes. A stock split is like making change. I give you two $10s for a $20.
In Walmart's case, shareholders get three shares for every share held – and that could make a big difference to Walmart employees. That's because the company provides a 15% match on the first $1,800 invested each year by eligible associates.
Walmart's company match works out to $270 – or not even enough to buy two full shares pre-split. After the split, however, that $270 match will buy more than four full shares of this blue chip stock.
What it means for WMT investors
Not much. As noted above, stock splits get the market excited for maybe a minute, but they are meaningless. The arithmetic changes, but the fundamentals don't.
For example, Walmart’s outstanding common stock will grow to approximately 8.1 billion from 2.7 billion shares. At the same time, the dividend per share will drop by two-thirds. Walmart, a member of the S&P 500 Dividend Aristocrats, just hiked its payout for a 51st consecutive year. For fiscal 2025, shareholders will receive an annual cash dividend of 83 cents a share on a post-split basis. That's down from $2.49 on a pre-split basis, but shareholders will own three times as many shares.
If there's anything interesting about WMT's stock split, it's that it will greatly reduce the name's weight in the Dow. Unlike the S&P 500, which is weighted by market capitalization, the Dow is weighted by price. Pre-split, Walmart is the 17th most important Dow Jones stock with a 3% weight in the index. Post-split, WMT will drop to 26th place with a weight of 1%.
Interestingly, Amazon.com (AMZN) will join the Dow at the beginning of trading next week. It will slot into the place formerly held by Walmart and its roughly 3% weighting in blue chip index.
AMZN has been one of the best stocks of the past 30 years, and anyone who put $1,000 into Amazon stock a couple of decades ago has done even better. Sadly, Walmart has been a market laggard over the last 20 years.
If past is prologue, more AMZN and less WMT in the Dow will be good for this bluest of blue-chip market benchmarks.
Related Content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Dan Burrows is Kiplinger's senior investing writer, having joined the publication full time in 2016.
A long-time financial journalist, Dan is a veteran of MarketWatch, CBS MoneyWatch, SmartMoney, InvestorPlace, DailyFinance and other tier 1 national publications. He has written for The Wall Street Journal, Bloomberg and Consumer Reports and his stories have appeared in the New York Daily News, the San Jose Mercury News and Investor's Business Daily, among many other outlets. As a senior writer at AOL's DailyFinance, Dan reported market news from the floor of the New York Stock Exchange.
Once upon a time – before his days as a financial reporter and assistant financial editor at legendary fashion trade paper Women's Wear Daily – Dan worked for Spy magazine, scribbled away at Time Inc. and contributed to Maxim magazine back when lad mags were a thing. He's also written for Esquire magazine's Dubious Achievements Awards.
In his current role at Kiplinger, Dan writes about markets and macroeconomics.
Dan holds a bachelor's degree from Oberlin College and a master's degree from Columbia University.
Disclosure: Dan does not trade individual stocks or securities. He is eternally long the U.S equity market, primarily through tax-advantaged accounts.
-
I missed the 2-Year IRMAA Rule. Now, my Medicare costs are skyrocketing. What are my options?
A spike in income could result in costly IRMAA charges on your Medicare premiums. We ask financial planning experts for advice.
-
How to Build Your Financial Legacy Three Piggy Banks at a Time
A wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
How to Build Your Financial Legacy Three Piggy Banks at a Time
A wealth adviser shares a childhood saving technique that taught him lessons of stewardship, generosity and responsibility and helped him answer the question we all need to answer to define our lives by impact rather than greed: 'What is this all for?'
-
Which of These Four Withdrawal Strategies Is Right for You?
Your retirement savings may need to last 30 years or more, so don't pick a withdrawal strategy without considering all the options. Here are four to explore.
-
July CPI Report Ignites a Risk-On Rally: Stock Market Today
Market participants price out worst-case scenarios for tariffs and inflation and will now turn their attention to employment and growth.
-
July CPI Report Boosts Rate-Cut Odds: What the Experts Say
The July CPI report shows that tariffs are having a slight impact on inflation, though not enough to keep the Fed from cutting interest rates.
-
DST Exit Strategies: An Expert Guide to What Happens When the Trust Sells
Understanding the endgame: How Delaware statutory trust dispositions work, what investors can expect and why the exit is probably more important than the entrance.
-
Think Selling Your Home 'As Is' Means You'll Have No Worries? Think Again
There are significant risks and legal obligations involved in selling a home 'as is' and by yourself, without a real estate agent.
-
Stocks Slip Ahead of July CPI Report: Stock Market Today
The latest inflation updates roll in this week and Wall Street is watching to see how much of an impact tariffs are having on cost pressures.
-
What the OBBB Means for Social Security Taxes and Your Retirement: A Wealth Adviser's Guide
For Americans in lower- and middle-income tax brackets, the enhanced deduction for older people reduces taxable income, shielding most of their Social Security benefits from being taxed.