Is Walmart A Good Stock To Buy
I published my first article on Walmart Inc. (NYSE:WMT) in May 2022, after the stock had sold off sharply due to lowered guidance and increasing pressure from inflation. I concluded that there was no point in rushing to buy WMT stock - after all, the stock was still trading at 19 times forward earnings.
is walmart a good stock to buy
Even as the broader market has slumped 17% this year, Walmart (WMT 0.43%) is one of the few stocks showing some signs of life. Though the retail giant has battled some major highs and lows recently as investors weigh the probability of a recession and its impact on retail spending, the shares are actually up 5% year to date.
This prompted the company to raise its full-year guidance, expecting net sales to grow by 5.5% in total. If Walmart achieves this goal, it would be a huge accomplishment considering retail spending has slowed for most operators this year. It would also be a testament to the fact that Walmart's position as a budget retailer helps it maintain a competitive edge despite a slowdown in spending. This could make this stock a valuable buy in the current economy.
Walmart is still a worthwhile buy right now for long-term investors looking for some stability to ride out the inevitable ups and downs of the market. The stock pays a 1.5% dividend yield, which is in line with the S&P 500, and it's got a fantastic dividend track record to back it. The company has raised its dividend for 20 years and maintains a healthy dividend payout ratio of 68%, which means its dividends aren't in jeopardy of a cut anytime soon.
Walmart (WMT) is a retail titan, the world's largest private-sector employer. And for a long time the Dow Jones stock was a huge growth winner for investors. Walmart continues to lock horns with online behemoth Amazon.com (AMZN) and is set to post earnings. So is Walmart stock a good buy right now? Read on.
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The relative strength line for Walmart stock is not ideal. It has generally been on the slide since late Nov. 2020. It is remains off its highs for the year despite recent gains. This line gauges a stock's performance vs. the broader S&P 500.
The longer term picture is also disappointing for Walmart stock. Over the past three years EPS has grown by an average 10%. Its average revenue growth rate of 4% over this same time period is also not impressive.
But Walmart earnings growth fails to meet the 25% benchmark sought by CAN SLIM connoisseurs. Investors keen on the stock could add it to their watchlist but may get better returns by focusing on companies with superior earnings and strong stock performance, such as those on the prestigious IBD 50 list.
Bottom line: Walmart stock is not a good buy right now. The stock remains well below its latest buy point and is well off highs for the year. Its latest earnings report is also around the corner, which adds risk. In addition, Walmart stock is unlikely to be a huge winner due to its fundamentals, which are not outstanding.
Walmart (WMT 0.43%) stock is traditionally seen as a safe investment during recessions. The retailing titan, which has navigated through dozens of demand slumps in the past few decades, tends to do well when consumers are focused on staple products and looking to stretch their budgets.
But many investors are still avoiding the stock today, especially after the chain reduced its earnings outlook. Heading into what could be a difficult holiday shopping season, Walmart seems to have inventory challenges that could harm profitability into 2023.
Walmart's stock price has dropped, making it a more appealing long-term holding. Investors are paying 0.6 times annual sales for the company today, compared to 0.7 times for Target and roughly 1 times sales for Costco.
Those factors, plus the stock's dividend that today yields nearly 2%, make it an attractive option for many investors. Shares might not surge as high during the next economic upswing. But Walmart's stock is also unlikely to crash at a time when the wider market is falling.
That said, the health crisis hasn't been all good for Walmart. The company has also had to spend more on pandemic-related costs. That hasn't stopped the company from blowing past recent expectations on both the top and bottom line. After reporting third-quarter earnings in November, many investors might be wondering: "Should I buy Walmart stock?" Here are a few points to consider:
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.
When you want to sell or transfer shares, update your mailing address or replace a lost stock certificate contact Computershare at 800-438-6278 or log in to your account at www.computershare.com/walmart.
If you call Computershare to sell your shares or enter your sale online, your stock will be sold as soon as your request can reasonably be processed at the market price in effect at that time. If the market is closed, your order will be submitted beginning at the start of the next day the stock market is open.
With inflation rising and the Fed raising interest rates, Walmart has fallen 9% this year. Can it drop more? See how low can WMT stock go by comparing its decline in previous market crashes. Here is a performance summary of all stocks in previous market crashes.
I bought my first stock in 1966 and then obtained my BS in banking in 1971 and MBA in corporate finance in 1972 from NYU. A study cycles began in the same year. A 9-year psychotherapeutic training apprenticeship followed. Many of my concepts concerning crowd psychology derive from this period. From 1972 to 1990, I worked on both the buy and the sell sides of Wall Street. From 1990 to 2004, I was a technology fund manager, strategist, and a member of the currency hedging committee with the Abu Dhabi Investment Authority. Since 2004, I have operated a service from Vienna, Austria. I am a member of the Kenos Circle, a Vienna-based group of futurists. I combine fundamentals with cycles through unique software as an aid in market forecasting. The influence of cycle theorists such as Ed Dewey, Charles Jayne, George Lindsay, and R.N. Elliott have been most valuable.
Led by MIT engineers and Wall Street analysts, Trefis (through its dashboards platform dashboards.trefis.com) helps you understand how a company's products, that you touch, read, or hear about everyday, impact its stock price. Surprisingly, the founders of Trefis discovered that along with most other people they just did not understand even the seemingly familiar companies around them: Apple, Google, Coca Cola, Walmart, GE, Ford, Gap, and others. This might include you though you may have invested money in these companies, or may have been working with one of them for years as an employee, or have consulted with them as an expert for a long time. You can play with assumptions, or try scenarios, as-well-as ask questions to other users and experts. The platform uses extensive data to show in a single snapshot what drives the value of a company's business. Trefis is currently used by hundreds of thousands of investors, company employees, and business professionals.
I am a seasoned freelance financial journalist reporting for a variety of publications across the globe. I was formerly a stocks and commodities reporter - and editor of print and online foreign currency coverage - at Shares Magazine, providing information and analysis for readers to make sound investment decisions in the UK and overseas. I was also a regular contributor to the magazine's extensive catalogue of bookazines and trading guides. Prior to this I was a reporter with the BaseMetals.com and TheBullionDesk.com newswires, breaking the latest news and providing in-depth analyses of the base and precious metals markets.
The Style Scores are a complementary set of indicators to use alongside the Zacks Rank. It allows the user to better focus on the stocks that are the best fit for his or her personal trading style.
Within each Score, stocks are graded into five groups: A, B, C, D and F. As you might remember from your school days, an A, is better than a B; a B is better than a C; a C is better than a D; and a D is better than an F.
As an investor, you want to buy stocks with the highest probability of success. That means you want to buy stocks with a Zacks Rank #1 or #2, Strong Buy or Buy, which also has a Score of an A or a B in your personal trading style.
Zacks' proprietary data indicates that Walmart Inc. is currently rated as a Zacks Rank 4 and we are expecting a below average return from the WMT shares relative to the market in the next few months. In addition, Walmart Inc. has a VGM Score of A (this is a weighted average of the individual Style Scores which allow you to focus on the stocks that best fit your personal trading style). Valuation metrics show that Walmart Inc. may be fairly valued. Its Value Score of C indicates it would be a neutral pick for value investors. The financial health and growth prospects of WMT, demonstrate its potential to perform inline with the market. It currently has a Growth Score of A. Recent price changes and earnings estimate revisions indicate this stock lacks momentum and would be a lackluster choice for momentum investors. 041b061a72