Walmart Stock Review, the Largest Retailer in the U.S.
Walmart is one of the largest chain retail and grocery brands in the United States. There are over 11,000 stores across the United States. The chances are, that if you drive for more than 20 minutes in any direction in the United States, you’ll probably hit a Walmart. So today we’re here to give a Walmart stock review based on Walmart’s firm dominance as the go-to superstore, as well as its intrinsic value as a company which we will derive through its PE ratio. We will also be taking a look at future projections, and current news for the company and the world that could have an effect on Walmart stock.
What is Walmart?
Walmart is a huge retailer that owns many discount department stores and grocery stores. Walmart offers everything from daily necessities like toilet paper (depending on whether there’s a pandemic or not), groceries, and home goods as well as sporting equipment, home repair goods, and technology. Its slogan “save money, live better” definitely holds true for the brand as Walmart is pitched as a discount retailer offering goods that undercut pretty much everyone in the retail market significantly. This practice has made Walmart a global powerhouse operating out of the United States, Mexico, the UK, Japan, and many other countries. Walmart has also sought to compete with many grocery stores in particular such as Publix, Albertson’s, and Kroger by opening up Walmart neighborhood market stores which are strictly groceries which allows them to operate at a much lower cost and require a much smaller area than Walmart supercenters, these being about 20% the size of a Walmart supercenter.
Walmart Stock Movement
Walmart publicly listed on the New York Stock Exchange in 1972 and within 16 years it was the most profitable retailer in the United States. By the 90s, the United States had locations from coast to coast. For much of its early years, Walmart was priced like a penny stock ranging from a few cents to a dollar for its first decade on the market. In the late 90s Walmart stock price went from $12.00 to nearly $60.00 in the span of just a couple years. This jump was likely due to it’s rapid expansion in the late 90s and dominance in the retail market. More recently, Walmart has seen steady growth and has seen especially good returns during the coronavirus pandemic. The coronavirus pandemic has crippled many stores and local businesses, however, Walmart has not only remained unaffected, but has thrived during the coronavirus pandemic. Walmart sells necessities that is why even though it is a retail chain Walmart will continue to see good returns throughout the pandemic.
Walmart Stock Development Review
As previously mentioned, Walmart has thrived during COVID-19. This shows through the fact that compared to many other companies that are having massive layoffs and furloughs, Walmart is on a hiring spree. The amount of people who are coming into Walmart to buy necessities and stock up just in case cannot currently be dealt with by the staff that Walmart has right now. Another sign of this is that Walmart has been giving out big bonuses to many of its retail workers for continuing to work through this virus. This shows that Walmart has some money to burn and as a result is giving back to its employees. This being said, Walmart currently has a PE ratio of 23.84, which in the retail industry is fairly high. The stock is overvalued right now, short-term the stock looks like it will be stagnant, mid-term and long-term it looks like it will give a return of something, which in the middle of an economic recession, it really doesn’t matter if you’re seeing 20% or 30% returns, you just want to sleep soundly at night knowing that your money is beating inflation.
Should You Invest in Walmart?
Throughout this Walmart stock review it has been mentioned that Walmart is safe during this economic recession. People will always need food, water, and the daily necessities that make life livable. Walmart is an extremely safe stock to invest in, despite it being overvalued. Its PE ratio may be high, but if the rest of your portfolio is dropping and you want to invest in something that will offset some of those losses, Walmart is a reliable stock to pick to fill this gap.
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[…] to write this blog post as I detoured from my typical Walmart grocery shopping, and ended up at a Walmart super center that was a little more out of the way than my usual one, and what I saw when I went […]