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Why Wal-Mart Stores, Inc. (WMT) Is Poised to Outperform

Wal-Mart Stores, Inc. (WMT)Based on the aggregated intelligence of 180,000-plus investors participating in Motley Fool CAPS, the Fool’s free investing community, retail behemoth Wal-Mart Stores, Inc. (NYSE:WMT) has earned a respected four-star ranking.

With that in mind, let’s take a closer look at Wal-Mart Stores, Inc. (NYSE:WMT), and see what CAPS investors are saying about the stock right now.

Wal-Mart facts

Headquarters (founded)

Bentonville, Ark. (1945)

Market Cap

$254.4 billion

Industry

Hypermarkets and super centers

Trailing-12-Month Revenue

$470.3 billion

Management

CEO Michael Duke (since 2009)

CFO Charles Holley (since 2010)

Return on Equity (average, past 3 years)

23.5%

Cash/Debt

$8.9 billion / $57.2 billion

Dividend Yield

2.4%

Competitors

Sources: S&P Capital IQ and Motley Fool CAPS.

On CAPS, 89% of the 7,087 members who have rated Wal-Mart Stores, Inc. (NYSE:WMT) believe the stock will outperform the S&P 500 going forward.

Just last week, one of those bulls, fellow Fool Thomas Engle (TMF1000), succinctly summed up the outperform case for our community:

WMT has been under pressure from Amazon and Costco. But I believe Wal-Mart Stores, Inc. (NYSE:WMT) will continue to grow. All three will take market share from weaker retailers. WMT now pays a $1.88 annual dividend which at a present price of $74.95 gives them a dividend yield of 2.5% which in a low dividend environment is a pretty good yield. They generate good cash flow and their cash flow yield is currently 4.9%. They aren’t trading for a bad value. In fact it is about the same as they traded during the recession. They are very stable and very consistent.

I think the investments they are making to develop their website will pay off and give Amazon a run for its money. It is Amazon’s third party dealers that will keep Amazon strong. Both are going to do well going forward.

Wal-Mart Stores, Inc. (NYSE:WMT) is also a real estate play with $113 billion in land and buildings. The land alone is worth $25 billion on the books which means it could easily be worth a lot more.

If you want market-thumping returns, you need to put together the best portfolio you can. Of course, despite a strong four-star rating, Wal-Mart Stores, Inc. (NYSE:WMT) may not be your top choice.

The article Why Wal-Mart Is Poised to Outperform originally appeared on Fool.com and is written by Brian Pacampara.

Fool contributor Brian Pacampara has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Costco Wholesale. The Motley Fool owns shares of Amazon.com and Costco Wholesale.

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