Walmart (WMT) is a U.S.-based multinational retail corporation that operates as a chain of discount department stores and a chain of warehouse stores. As of Sept. 2021, the company has over 10,500 locations across the globe. Additionally, Walmart is one of the largest private employer in the world with over 2.2 million employees.
Walmart has made investments in its employees, such as increasing wages and offering benefits for same-sex partners. For investors, the company is an attractive investment, as it has outperformed the S&P 500 over the past few years. For investors on the fence, the following are the top four benefits of investing in Walmart.
Key Takeaways
- Walmart's focused expansion into emerging markets provides investors some stability as they grow their international portfolio by backing a well-known company into these newer Asian markets.
- Technology investments made by Walmart allow the company to remain relevant and profitable in spite of increased competition from e-retailers.
- Reinvesting in the company as well as giving back to shareholders via increasing dividends provides a strong message regarding the health of the company.
Stability and Brand Name
With Walmart, it is pretty well-known what an investor is going to get from an operational perspective. Walmart remains a stable company that should be viewed as a long-term blue-chip investment.
Roughly 75% of Walmart's store management began their careers as hourly employees with the company. This shows the company's focus on retaining talent by investing in employee growth as well as growing the business.
Dividends and Reinvestment
For investors, Walmart has done a great job managing its increasing profit, using a smart reinvestment strategy, and giving back to shareholders. As of Jan. 2020, the company has reinvested over $10.7 billion in capital expenditures (CAPEX), paid out $6 billion in dividends, and bought back over $5.7 billion in shares.
Walmart has a track record of increasing its annual dividend every year since it started paying a dividend in 1974, and its dividend yield is roughly 1.55%, as of Dec. 2021. As of Jan 2020, Walmart sat on almost $9.5 billion in cash, providing additional opportunities for the company to reinvest and return capital to shareholders. These are all good signs that regardless of current stock performance, Walmart should continue to grow and add value to shareholders through capital gains and dividend payments.
Focused Effort on Continuous Innovation
While the company is a retail giant, it has also done an admirable job ensuring it is not slow-moving. Walmart has made strides to introduce new technologies, such as a "scan and go" app for iOS and Android.
The scan-and-go app is designed to offer customers a more efficient way to shop, and also makes Walmart’s daily operations more efficient. Additionally, the company has been investing in e-commerce to stave off competition from the likes of Amazon and eBay. It also rolled out emerging e-commerce strategies such as pickup lockers for online orders.
FAQs
Stability and Brand Name. With Walmart, it is pretty well-known what an investor is going to get from an operational perspective. Walmart remains a stable company that should be viewed as a long-term blue-chip investment. Roughly 75% of Walmart's store management began their careers as hourly employees with the company ...
Why should I invest into Walmart? ›
Walmart isn't known for its impressive profit margins, but the chain's earnings power is improving. Operating income spiked in the past year and is projected to outpace revenue again in 2024. It's great news for the business, meanwhile, that these gains arrived even as the company cuts prices amid strong sales growth.
Is Walmart a good place to invest in? ›
Walmart has 8.32% upside potential, based on the analysts' average price target. Is WMT a Buy, Sell or Hold? Walmart has a conensus rating of Strong Buy which is based on 25 buy ratings, 3 hold ratings and 0 sell ratings.
How much is $1000 invested in Walmart in 1980? ›
An investment of $1,000 at the start of 1980 would be worth over $1.9 million today. Watch Walmart stock trade in real time here.
Is Walmart a long term investment? ›
This part of its business produced fiscal 2024 revenue of $114.6 billion, up over 13% from 2023. A long history of dividends adds the icing on the cake, providing a source of passive income. These various factors combine to make Walmart a worthy long-term investment.
Why is Walmart a safe stock? ›
Walmart is a safe stock that has a long track record of raising its dividend, but investors should understand that that's what they're paying up for. For the right kind of investor, Walmart is a smart buy. It's a well-managed, dividend-paying recession-proof business.
Why is Walmart so profitable? ›
Walmart's success can be attributed to having their own supply chain to streamline fulfillment and cut down on costs. It also provides them with more control over their logistics network. In this article, we take a closer look at the Walmart supply chain and why it continues to be so successful decades later.
Is it better to invest in Walmart or Target? ›
The Winner: Target
With a valuation less than half as rich as Walmart, and a more attractive dividend yield, investors should be willing to bear a little more risk for Target.
Who is Walmart biggest investor? ›
There are about 10,500 Walmart locations across 20 different countries. Jim Walton, Alice Walton, and Rob Walton are the top three individual shareholders of Walmart. Walmart's largest institutional investors include the John T. Walton Estate Trust, Vanguard Group, and BlackRock.
Is Walmart a better investment than Amazon? ›
Overall, Amazon is growing faster than Walmart, with a 14% year-over-year revenue increase in 2023, and outside of pressure it experienced in 2022, it also usually reports a higher operating margin. Amazon has tailwinds from its many businesses, in particular from its investment in artificial intelligence (AI).
And if you had invested $1,000 into Walmart a decade ago, your investment would have more than doubled in value and be worth about $2,443 as of Nov.
Can you make money on Walmart stock? ›
Walmart's dividend yield is 1.46%, and the payout for fiscal 2023 is $2.28 per share. The annualized dividend is payable in four equal installments of $0.57 per share every quarter.
How long will it take for a $1000 investment to double in size when invested at the rate of 8% per year? ›
For example, if an investment scheme promises an 8% annual compounded rate of return, it will take approximately nine years (72 / 8 = 9) to double the invested money.
Why is Walmart stock so cheap? ›
As for why Walmart decided to split its stock, the company said it wanted to lower WMT's share price so it was easier for its employees to purchase shares in the company via its employee stock purchase plan.
What is the 10 year return on Walmart stock? ›
Ten Year Stock Price Total Return for Walmart is calculated as follows: Last Close Price [ 60.14 ] / Adj Prior Close Price [ 21.09 ] (-) 1 (=) Total Return [ 185.2% ] Prior price dividend adjustment factor is 0.81.
How to invest money in Walmart? ›
Yes, you can purchase Walmart stock through Computershare. To receive information about Computershare's direct stock purchase plan, which is not sponsored by Walmart, you can contact Computershare globally at 1-800-438-6278 or visit www.computershare.com/walmart.
What is special about Walmart? ›
Every Day Low Prices on a Broad Assortment - Anytime, Anywhere. Every Day Low Price (EDLP) is the cornerstone of our strategy, and our price focus has never been stronger. Today's customer seeks the convenience of one-stop shopping that we offer.
Why is it good to invest in big companies? ›
Large-cap stocks tend to be companies that are established in their markets with long-term histories. Some feel this makes them “safer” to invest in. Larger company stocks also often pay dividends, allowing you to capture some of the return of your investment, which some investors view as a benefit.
Why is it good to invest in retail industry? ›
On the other hand, retail is an attractive sector for a growth investor due to its propensity for turning in bigger-than-average gains when the market is rising.
Is Walmart a better stock than target? ›
Shares of Walmart are up 16.6% year-to-date and up 35% over the last year, while Target stock has gained 18% year-to-date but is up only 8.8% over the last year. With Walmart rising so much more than Target over the last year, it's no surprise that Walmart is trading at a much higher valuation.
