![]() Should you invest $1,000 in Walmart right now?īefore you buy stock in Walmart, consider this: However, I think that buying after a pullback could be the best approach with the stock. My view is that Walmart remains a good pick for long-term investors. Walmart's 2024 guidance projects that revenue will increase by only 2.5% to 3% on a constant-currency basis. Some investors could especially be concerned about Walmart's valuation with the company's near-term growth prospects. This forward earnings multiple is higher than the level from 30 years ago, when the company arguably had significantly greater growth prospects ahead of it. Walmart stock trades at nearly 24 times expected earnings. Its shares are relatively expensive - and I'm not talking about the share price itself. I think there's one main knock against Walmart for investors to consider. Walmart joined the Dividend Kings club last year with its 50th consecutive year of dividend increases. The retail giant's dividend yield currently stands at 1.35%. Income investors have a lot to like with Walmart's dividend. The company is also expanding its global advertising business with revenue soaring 20% year over year in Q4. Walmart has multiple ways to continue growing. On a constant-currency basis, its revenue jumped 7.9%. Walmart reported 7.3% year-over-year revenue growth for the fourth quarter of 2023. The discount retailer also continues to deliver solid growth. Few businesses are as resilient as Walmart. It has textbook moats of cost advantages and economies of scale. Walmart ranks as the biggest retailer in the world based on revenue. I'd put the company's competitive position near the top of the list. WMT data by YCharts Good reasons to consider buying WalmartĪlthough buying Walmart solely because a stock split is on the way isn't the best move, there are other good reasons to consider buying the stock. Although shares rose moderately immediately after the split, all of the gains evaporated within a couple of weeks. The most recent occurred on April 20, 1999, when Walmart conducted a 2-for-1 stock split. The company has conducted nine stock splits in the past. That's been the case with Walmart in the past. However, such gains are usually temporary. The idea is that the lower price results in heavier buying by retail investors who might have avoided the stock when it was more expensive. Yes, stock splits can sometimes cause a stock to jump. Nothing will change about the company's underlying prospects when it increases the number of outstanding shares. ![]() Let me say right off the bat that it's probably not a great idea to buy Walmart shares just because of the upcoming stock split.
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