Dick’s Pays a Higher Dividend Yield Than Walmart. Is It Worth the Risk?
Dick's Sporting Goods yields more than four times what Walmart pays, but its most recent fiscal year revealed a payout that free cash flow could not fully cover, and that was before a struggling Foot Locker added a fresh layer…
Dick’s Sporting Goods (NYSE:DKS | DKS Price Prediction) and Walmart (NASDAQ:WMT) both reported in late August, and their quarters went in opposite directions. Dick’s missed estimates and cut guidance, while Foot Locker posted a loss. Walmart beat estimates, raised its outlook, and kept growing eCommerce. If you depend on dividend income, the question is whether Dick’s higher yield makes up for the integration risk.
Foot Locker Sinks Dick’s Quarter While Walmart’s Delivery Engine Keeps Humming
Dick’s revenue rose 53.2% to $5.59B, almost entirely because it bought Foot Locker. Adjusted EPS of $3.53 missed the $3.76 estimate. The core stores did fine: comps rose 4.9%. Foot Locker comps fell 3.6%, and the division lost $31.88M. CEO Lauren Hobart said the company is “taking a more cautious view of the balance of the year,” and the numbers back that up. Full-year EPS guidance dropped to $11.00 to $12.00 from $13.50 to $14.50.
Walmart’s adjusted EPS of $0.81 beat the $0.74 estimate. Global eCommerce grew 23%, and Walmart Connect advertising grew 43%. Ads carry higher margins than groceries, so they help protect profits. CEO John Furner said shoppers choose Walmart for “price, speed, and convenience across a broad assortment.” Today Walmart launched a joint membership with Sam’s Club, a sign it is still building recurring fee income.
| Dividend Lens | Dick’s | Walmart |
|---|---|---|
| Annual Dividend | $5 | $0.99 |
| Yield | 3.5% | 0.83% |
| Payout Ratio (TTM EPS) | 54% | 36% |
| FY2026 Free Cash Flow Coverage | 0.97x | 1.99x |
Free Cash Flow Exposes Dick’s, Thin Cushion
In the fiscal year that ended January 2026, Dick’s produced $400.2M of free cash flow and paid $413.9M in dividends. That shortfall came before up to $750M in Foot Locker charges, so the payout already has very little room. Walmart generated $14.92B in free cash flow against $7.51B in dividends, covering the payout about twice.
The dividend records differ too. Walmart’s dividend data shows a raise every year since at least 1999. The per-share amount fell from $0.57 in 2023 to $0.2075 in 2024 because of a stock split. Dick’s regular quarterly payout rose from $1.10 in 2024 to $1.25, helped by a 3% raise. Its $5.9375 payment in 2021 was a one-time special dividend, so it falls outside the regular income stream.
Foot Locker’s Holiday Quarter Will Test the Payout
I’m watching whether Foot Locker’s loss stays inside the $40M to $80M range Dick’s guided, and whether 110 store closings clear out old inventory. For Walmart, track how far it puts tariff refunds back into lower prices this half.
Why Walmart’s Dividend Looks Sturdier for Retirement Income
For reliable retirement income, Walmart’s dividend rests on steadier ground. Its yield is small, and the stock trades at 43x trailing earnings, which is expensive. Still, I trust a dividend covered twice over by free cash flow more than one that free cash flow didn’t fully cover even before the Foot Locker problems. Dick’s offers a higher yield, but it comes with recovery risk, and its shares are down 35.6% over the past year. I would change my mind if Foot Locker comps turn positive and free cash flow clearly covers the $5 payout again.
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Chris Lange is a financial and geopolitical writer with more than a decade of experience covering a myriad of topics. He has published thousands of articles for 24/7 Wall St., with past coverage focused heavily on stocks, IPOs, healthcare, defense, global affairs, and technology.
His work has been quoted, or referenced by a number of outlets including Business Insider, USA Today, Yahoo Finance, MSN, The Motley Fool, and many other publications. A graduate of Southwestern University, he studied business with a focus on investments and has previous experience in banking and startups.
When not reading or writing the news, he is following his passion for Lacrosse, playing chess, or building solar projects with his dad.
