Topic: Growth Stocks

WAL-MART STORES INC. $75 – New York symbol WMT

WAL-MART STORES INC. $75 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.2 billion; Market cap: $240.0 billion; Price-to-sales ratio: 0.5; Dividend yield: 2.6%; TSINetwork Rating: Above Average; www.walmart .com) aims to spur its online sales with a new plan called ShippingPass that offers U.S. shoppers unlimited threeday shipping for $50 a year. This should help it compete with Amazon’s Prime service, which offers two-day shipping for an annual fee of $99.

Thanks to investments like this, Wal-Mart’s online sales jumped 17% in the first quarter of its 2016 fiscal year, which ended April 30, 2015.

Wal-Mart is also starting to see the benefits of its efforts to improve sales at its U.S. stores, including speeding up checkout lines and opening smaller stores. Same-stores sales in the U.S. (62% of total sales) rose 1.1%, the third straight quarter of growth.

Overall revenue fell 0.1%, to $114.0 billion from $114.2 billion a year earlier. Without the negative impact of the high U.S. dollar on its overseas operations, sales gained 2.7%.

Due to increased spending on its websites and rising labour costs, earnings per share fell 6.4% in the quarter, to $1.03 from $1.10.

The company will probably earn $4.86 a share for all of fiscal 2016, and the stock trades at a moderate 15.4 times that forecast.

Wal-Mart is a buy.

Comments

Tell Us What YOU Think

You must be logged in to post a comment.

Please be respectful with your comments and help us keep this an area that everyone can enjoy. If you believe a comment is abusive or otherwise violates our Terms of Use, please click here to report it to the administrator.