Over the years, Wal-Mart Stores, Inc. (NYSE:WMT) has introduced several innovative strategies that have helped it improve its share in the global market while also enabling it the leverage to penetrate into emerging markets. In terms of invested capital, Wal-Mart is a huge business with a total market capitalization of more than $245 billion and average trading volume of more than 9 million. The stock’s performance in the recent few weeks has been impressive, showing steady upward trend in the midst of improving investor sentiment and a bright economic outlook.
Dividend and valuation
Wal-Mart Stores, Inc. (NYSE:WMT) has also announced an impressive hike of 18% in its dividend — one of the largest increases in its history. This has reaffirmed shareholders’ confidence in the positive and promising performance of the business. The stock has traditionally enjoyed a good dividend history, with a yield of 2.6% that exceeds industry standards. Moreover, the stock has an impressive forward looking price to earnings ratio of 12.5 and pays its investors $0.47 in dividends on earnings per share $5.02. There has been an almost 100% increase in dividend per share since 2009.
There are, however, specific developments that can jeopardize the stock’s recent upward movement. Anxiety over slowing growth rate in China and renewed signs of Europe’s economic weakness are two major developments that may determine the stock’s performance in the current fiscal year. Nevertheless, Wal-Mart Stores, Inc. (NYSE:WMT) has demonstrated incredible resilience against negative market forces and its stock has posted an impressive performance. This has mostly been the result of the stock’s defensive beta of less than 0.4 which means that it enjoys a wide competitive advantage over its major competitors.
Costco Wholesale Corporation (NASDAQ:COST) is the biggest competitor of Wal-Mart Stores, Inc. (NYSE:WMT), with an enormous market capitalization of almost $46 billion and trading volume of more than 2.1 million. Costco Wholesale Corporation (NASDAQ:COST)’s performance in the previous fiscal quarter was extraordinary. Sales rose 8% and the company reported EPS of $1.1, which was more than what the sell-side was looking for this time around. The business has registered healthy growth so far in the current fiscal year, with an increase of 6% in US sales, while international sales increased by 5%.