Wal-Mart Stores, Inc. (WMT), Family Dollar Stores, Inc. (FDO): Will This Store Ever Stop Growing?

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And from Amazon.com, Inc. (NASDAQ:AMZN)

Amazon.com, Inc. (NASDAQ:AMZN) is the veteran in online shopping and Wal-Mart can learn a lot from it to grow in this segment. Amazon.com, Inc. (NASDAQ:AMZN)’s huge selection and range of products works to its advantage greatly, which Wal-Mart lacks currently. Online shopping is mainly done for its convenience and if customers do not get what they want, they switch to where they get it from.

Amazon.com, Inc. (NASDAQ:AMZN) is and has always been dependable. Its customer service has always been a benchmark. Wal-Mart’s service has been good, but when it comes to competing for the level of service customers expect, Amazon.com, Inc. (NASDAQ:AMZN) has set the standards very high.

Amazon.com, Inc. (NASDAQ:AMZN) has better prices for most of the products it offers compared to Wal-Mart. Wal-Mart’s prices are lower only in certain cases where the customer has to go and pick the item up from its store. The trade-off between savings of your delivery costs (which is not much if you drive or rent a cab to and fro from a Wal-Mart store) and that of getting it delivered from Amazon.com, Inc. (NASDAQ:AMZN) is so less, not to forget the time saved, that people will readily place the order online.

Final words

Wal-Mart is so huge that it always makes believe me that it can’t grow further, but it almost always proves me wrong. It has scope in the international market as the acquisition of 51% stake in Massmart Holdings strengthens its position to capture the South African market. The company has also received a green signal from the Indian government to enter the country’s multi-brand retail. Both these options will help the company grow.

Wal-Mart returned about $3.8 billion cash to shareholders in the last quarter, $1.6 billion in dividends and $2.2 billion in the form of share repurchases. The company is fairly priced at its current valuation of 15.5 times. The stock is currently trading at record highs so I won’t suggest investing in it at the moment, but holding your investments would be a good strategy as of now.

The article Will This Store Ever Stop Growing? originally appeared on Fool.com is written by tarun bachhawat.

tarun bachhawat has no position in any stocks mentioned. The Motley Fool recommends Amazon.com. The Motley Fool owns shares of Amazon.com. tarun is a member of The Motley Fool Blog Network — entries represent the personal opinion of the blogger and are not formally edited.

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