Today, we’ll look at Dow Jones Industrial Average component Wal-Mart (NYSE:WMT). Unlike some of the more obscure names in the index, there’s no doubt you’ve heard of this company — even if you have been living under a rock since its founding 66 years ago.

Wal-Mart has just about everything a person needs at each of its massive stores, and in many ways is really the forerunner of Amazon (NASDAQ:AMZN). The company gets a lot of flak for putting mom-and-pop stores out of business, but there’s no denying that it is one of America’s greatest success stories — that goes for the stock as well. The stock is literally a 1,000-bagger since it went public in 1972 at a split-adjusted price of 5.69 cents per share.

Wal-Mart is so powerful that it barely batted an eye at the financial crisis. While most other companies stumbled and even fought to stay in business, Wal-Mart’s earnings actually grew an astonishing 20% in FY 2008, and grew another 7.3% in 2009!

Things have only improved. There are no key drivers to Wal-Mart. Wal-Mart just is. In many small cities and rural areas, it might be the only game in town. In large cities, it can be almost as dominant, although Target (NYSE:TGT) now offers real competition.

The company’s financials just hum along. It has $8.1 billion in cash on hand. You might fall out of your chair when you see that Wal-Mart has $48.5 billion in debt, but it pays only about 5.5% interest on it. As you might expect, at this point in its history Wal-Mart is a cash machine. Trailing 12-month cash flow was $10.6 billion. The company also had 2.3 times the amount of free cash flow necessary to pay its 2.6% dividend. It’s a meager dividend, all things considered.

Unlike every other stock in the Dow or, for that matter, in the entire market, the company remains tightly controlled by insiders, who hold 48% of the stock. When you buy Wal-Mart stock, you can be assured that management’s interests are aligned with your own. A rare thing, indeed.

Conclusion

Does all this mean the stock is worth buying? Stock analysts looking out five years on Wal-Mart see annualized earnings growth at 9.4% — still, after all these years. At a stock price of $57 on FY 2011 earnings of $4.49, the stock presently trades at a P/E of 12.7. That’s somewhat pricey given its growth rate, but the premium is deserved given its rich history, insider ownership, free cash flow generation and brand value.

If we put an 13 P/E on it, on projected 2015 earnings of $7.57 per share, we get a price target of right about $98. That’s a 75% upside from today’s prices. That doesn’t leave a margin for error, but Wal-Mart probably doesn’t make many errors, either. That being said, retirement holders might not want to initiate new positions at this price.

• I believe WMT is a buy for regular accounts.
• I believe WMT is a hold for retirement accounts.

As of this writing, Lawrence Meyers did not own a position in any of the aforementioned stocks. Check out Meyers’ take on other Dow Jones stocks here.