Wal-Mart in a league of its own
The leading retailer remains a top defensive stock for a weak economy.
Wal-Mart (WMT), which is celebrating its 50th year in business, hardly needs an introduction. This retailer has it all. It has dominated the discount market for many years and will continue to do so for the foreseeable future.
In keeping with my advice to buy stocks in companies that can continue to generate profits in a weak economy, I am adding the shares to our Recommended List.
Recently, CEO Mike Duke said, "Wal-Mart is the best-positioned global retailer in the world today." It may sound boastful, but he's right. No one else is in the same league.
Why do people flock there? Because it's cheap, of course. Wal-Mart consistently manages to undersell everyone else.
The company employs more than two million "associates" world-wide and claims to serve more than 200 million customers a week.
And while Wal-Mart may represent the values of middle America, it has become an international retailer with 10,130 stores under 69 different banners in 27 countries.
In mid-May, the company reported results for its 2013 fiscal first quarter (to April 30). Earnings from continuing operations came in at $1.09 per share. That was up from $0.96 the year before and ahead of the company guidance of between $1.01 and $1.06 per share.
U.S. comparable stores sales increased by 2.6% while sales at its Sam's Club stores were up 5.3%, not including fuel. Those are healthy increases for a well-established company in a weak economy.
Consolidated net sales were $112.3 billion, an increase of 8.6% from last year. Wal-Mart ended the first quarter with free cash flow of $3.1 billion and had cash in the bank of $8.1 billion.
Return on investment (ROI) for the trailing 12-month period was an impressive 18.1%. From a financial perspective, this is a very sound company.
The share price has moved higher in recent months, bucking the trend in the U.S. market. However, at about 14 times anticipated fiscal 2013 earnings, it does not appear to be out of line.
In March, the company announced a 9% dividend increase, bringing the annualized payout to $1.59 a share. Yielding 2.4%, Wal'Mart is a 'Buy' for defensive investors.
More from TheStockAdvisors:
- Home Depot: Major improvement?
- Tiffany: Pullack creates opportunity
- Walgreen: 36 years of rising dividends
TO Charlie 1914, I have been an associate at Wal-Mart for 21 years, when a hurricane came thru VA and knocked our power out for over 21 days I lost all the food that my family had in the freezer about $300.00. With three young kids and missing work due to the storm, I knew we would not be able to replace the meat that we lost when I returned to work I was asked if I had lost anything with the storm and I told the person about the freezer the next day I had a check from the associate in critical needs fund, When disasters hit like Katrina Wal-Mart had truck loads of relief supplies there before the government could act. When 911 hit the rescue workers boots soles were melting. Wal-Mart showed up with trailer loads of boots and gloves to help. Yes I guess the best decision I ever made was accepting a job at Wal-mart in 1991. You get back what you put into something honest hard work is rewarded I'm proof I have a great job with good benefits, You always have people who are unhappy that try to get something for nothing and I think that’s where the negative comments come from... WORK ETHIC is something some people will never have
I personally think Sam Walton would be disgusted by how wal-mart is acting today. I remember when he was alive, you could go into wal-mart, get American made products, pay a low price for them, and not even have to wait in line. Now it's cheap chinese products, nasty produce, and waiting 20 minutes for a cashier. I'm so thankful I live in an area where there's enough options that I don't have to shop there.
Its too bad they dont treat their employees better than they do, sounds like they can afford it. I hope I never have to work at WalMart again. I have never been treated so bad at a work place. I try not to have to shop there either. I dont like giving them any of my money/!
wake up and blend you idiots, you cant stop it. its there and growing like a malignite cancerous boil, we as humans are no doctors nor do we have a solution, look around big boy, wal-mart is only a spit in the bucket, ever heard of greed and power ? it permeates the whole world, one business like wally-world is blending, look at them. UNHAPPY SUCCESS ?? had you rather die broke and hungry or rich and well fed? bitch all you want, i will see you at WAL-MART.
Walmart is usually cheaper in price, but not on everything. That would be virtually impossible! I can vouch and say that they sell cheap crap! Most of my major purchases from walmart have broken beyond repair. If you want a good reliable lawn mower, power washer or other major iems, I suggest that you pay the extra buck and void going to wally world. The meats are pre-packaged somewhere??? and distributed from several vendors. Have you ever wondered about the quality??? Wally world does not have their own butchers. They made that clear the day they debut the super center concept. The butchers that they did have threatened to form a union. Wal mart then fired them all and went to third parties for their meats. The other thing is, wal mart does not care about ANYONE! They will step on anyone in order to gain market share etc... In the end, they may employ the most people and serve the most, they are also no different than the Arab emirates of the world.
When was the last time you can honestly say that you received the best in customer service from any wal mart???
Copyright © 2014 Microsoft. All rights reserved.
The grocery giant expanded its Simple Truth line nationwide 2 years ago and has seen consistent growth.
VIDEO ON MSN MONEY
Top Stocks provides analysis about the most noteworthy stocks in the market each day, combining some of the best content from around the MSN Money site and the rest of the Web.
Contributors include professional investors and journalists affiliated with MSN Money.
Follow us on Twitter @topstocksmsn.