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Wal-Mart Stores, Inc. (WMT) Is the Ideal Stock for the Next Recession

Wal-Mart Stores, Inc. (NYSE:WMT) is the largest discount retailer in the world. The company has generated $485.6 billion in sales over the last 12 months. Wal-Mart has profits of $15.5 billion in the same time period.

supermarket-435452_1280

The table below compares Wal-Mart’s size to its largest competitors in the United States:

Company Revenue Earnings Profit Margin
Wal-Mart $485.6 billion $15.5 billion 3.2%
Costco $115.9 billion $2.3 billion 2.0%
Amazon $95.8 billion -$0.2 billion -0.2%
Target $72.7 billion $3.2 billion 4.4%

Wal-Mart generates 70% more sales than Costco (COST), Amazon (AMZN), and Target (TGTcombined. Wal-Mart generates 192% more profit than Costco, Amazon, and Target combined. Only Target has a higher profit margin than Wal-Mart of these large discounters.

The table above clearly demonstrates that Wal-Mart operates on a different scale than its rivals. Despite being the undisputed industry leader, Wal-Mart is the cheapest of these businesses.

Amazon doesn’t have a price-to-earnings ratio, but even if it was profitable, it is trading at a lofty valuation. Click here to see Wal-Mart and Amazon compared in detail.

Target currently has a price-to-earnings ratio of 15.1, and Costco has a price-to-earnings ratio of 25.2. Compare this to Wal-Mart’s price-to-earnings ratio of just 13.4… Wal-Mart looks cheap compared to its peers. Another reason why we are interested in Wal-Mart is that billionaires Warren Buffett and Bill Gates are the top 2 holders of the stock in Insider Monkey’s hedge fund database.

Now Is The Best Time to Buy Wal-Mart In the Last Decade

The image below shows Wal-Mart’s dividend yield over the last decade.

WMT Dividend Yield

As you can see Wal-Mart has never had as high a dividend yield as it does now. The company is currently yielding 3.0% – well above the S&P 500’s dividend yield of 2.2%.

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