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/!
Many of the people who work at Wal-Mart had few or no job skills when they were hired. Frankly they should be grateful for the opportunity Wal-Mart gave them to have a life.
Many of you expect American business should give you a free ride or pay a better wage than you are earning. You might discover that for any business it is always on operating on the edge of making money or losing it.
We just have too many moochers and losers in this country either living off the government or sucking off their employers. Of course, the liberals constantly scream that the rich should pay their fair share which is ridiculous when they already foot most of the bill now.
Go Mitt go. You are our last hope from all these GD dopes!
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.
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
The solid report comes a month after the retailer closed all of its Canadian operations.
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.