Wal-Mart Stores (NYSE: WMT) is looking more and more like Amazon.com (NASDAQ: AMZN) every day, which is a good thing.wal-mart-earnings

Amazon has been dominating the retail world for years. The big reason is its stronghold on e-commerce. Wal-Mart has lagged in this area, hoping that its vast physical presence could keep it growing. Even one of Wal-Mart’s biggest traffic generators, groceries, is facing competition from Amazon.

Wal-Mart also tried opening up smaller stores to help appeal to shoppers looking for more convenience. That was all to virtually no avail. Now, the big retaier is getting serious about its online presence.

Wal-Mart Weapon: 2-Day Delivery

The Wal-Mart versus Amazon battle has been an interesting one to watch. The big news of late is that Wal-Mart is rolling full steam into the two-day delivery market. Previously, it had been offering three-day delivery. Free two-day delivery is a staple of Amazon’s Prime Service, which includes two-day delivery for free.

Wal-Mart is taking direct aim at Amazon with its new ShippingPass service. It also just started offering a free one-month trial of ShippingPass.The details of the ShippingPass includes free returns and minimums for just $49 a year. . .  half the cost of Amazon Prime. Assuming Wal-Mart can continue to leverage its purchasing power to be the low-cost leader, then Wal-Mart could actually gain a leg up in the online shopping game.

All these new Wal-Mart initiatives are part of the process to become more than just a seller of stuff. It’s about resonating with the customer. It also appears that Wal-Mart’s investments in training and labor is paying off. It’s all about getting current customers to shop more, but also getting customers that have previously abandoned the retailer to give it a second chance.

Wal-Mart Stock: The Dividend Matters

With all the retail carnage, Wal-Mart has been a bright spot. Shares of the retail giant are up 20% in 2016, while the S&P SPDR Retail ETF (NYSE: XRT) is flat. However, longer-term, Wal-Mart has been disappointing, underperforming the XRT ETF, Amazon and S&P 500 over the last three- and five-year periods.

But given the big changes, we could see more investors giving Wal-Mart stock a second chance. The big difference for investors between Amazon and Wal-Mart is that Wal-Mart stock offers a 2.7% dividend and makes $14.4 billion a year in income. Amazon doesn’t pay a dividend and won’t be paying one for a while. And over the last year, Amazon only pulled in $1.2 billion in income. Wal-Mart also has a 41-year streak of consecutive dividend increases.

And with its stronger internet presence, Wal-Mart should get a boost in margins, returns on capital and better brand awareness. The company hopes this will lead to more in-store sales as well, as customers decide to give Wal-Mart another chance. There’s also the rollout of Wal-Mart Mobile Pay to make the shopping and checkout experience more seamless.

For investors, the silver lining in Wal-Mart stock, beside the solid dividend, is that the company has plenty of room to grow in e-commerce. Amazon’s online sales are six times that of Wal-Mart’s. As I’ve said before, it takes time to turn around a massive company, but Wal-Mart is  at least making turning in the right direction.

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Published by Wyatt Investment Research at