Wouldn’t You Like To Be A Walton?

by Louis Navellier | September 20, 2012 3:01 pm

Wouldn’t You Like To Be A Walton?

walmart Wouldn't You Like To Be A Walton?No, I’m not talking about the TV show back in the ’70s—there’s not too many of us that want to live on the side of a mountain without any air conditioning or many of the modern conveniences that make life a whole lot easier.

I’m talking about the heirs to the world’s largest retailer—Wal-Mart (NYSE:WMT[1])—that take up a whopping four places on the Forbes 400 list of the richest people in America.

The top three on the list are well known — Microsoft’s (NASDAQ:MSFT[2]) Bill Gates, Berkshire Hathaway’s (NYSE:BRK.A[3]) Warren Buffett and Oracle’s (NASDAQ:ORCL[4]) Larry Ellison — but what you might not know is that No. 6 through No. 9 are all taken up by Sam Walton’s heirs:

At No. 6, Christy Walton is the richest woman in the U.S. and widow of John Walton. Her substantial investment in First Solar (NASDAQ:FSLR[5]) tanked this year, dropping some 75%, narrowing her lead above her brother-in-law.

Right on her heels is Jim Walton, the youngest son of Wal-Mart founder Sam Walton, and his siblings Alice Walton and S. Robson Walton. Collectively, the Waltons control just under half of the company, and their WMT shares are up more than 40% in the last year—pushing the family’s combined total wealth to just over $100 billion.

And this monster wealth shouldn’t be much of a surprise when you consider just how big Wal-Mart is. I’m a numbers guy, so here are a few statistics[6] to put it into perspective.

So Wal-Mart is clearly a big company, and it also has solid profit potential.

In the second quarter, Wal-Mart’s earnings advanced 8% to $1.18 per share, topping the consensus estimate. And thanks to strong international sales and growing membership at its Sam’s Club warehouse, Wal-Mart also upwardly revised its 2012 earnings guidance to a range of $4.83 and $4.93 per share.

And because of its size and economy of scale, most retailers are hard-pressed to beat Wal-Mart’s rock bottom prices, so through the recession and gradual recovery the company was able to grow its sales and earnings each quarter and outperform its main rivals over the past year.

Also helping support shares are the company’s hefty $15 billion buyback program—of which there is about $7.9 billion left. In addition, the company’s dividend yield stands at 2.1%, and the company has been posting double-digit dividend increases over the past five years.

So despite the run-up that we’ve seen over the last year, I believe that there is still significant upside in Wal-Mart stock.

Good night John-Boy!

 

 

Endnotes:
  1. WMT: http://studio-5.financialcontent.com/investplace/quote?Symbol=WMT
  2. MSFT: http://studio-5.financialcontent.com/investplace/quote?Symbol=MSFT
  3. BRK.A: http://studio-5.financialcontent.com/investplace/quote?Symbol=BRK.A
  4. ORCL: http://studio-5.financialcontent.com/investplace/quote?Symbol=ORCL
  5. FSLR: http://studio-5.financialcontent.com/investplace/quote?Symbol=FSLR
  6. few statistics: http://investorplace.com/2012/05/wal-mart-well-ahead-of-the-curve-wmt-wag-cvs-cost-swy/

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