WMT Stock Alert: Walmart Is Still a Blue-Chip That Will Keep You in the Green


  • Walmart’s push into groceries and e-commerce are paying off. 
  • The company split its stock earlier this year as it hit an all-time high. 
  • New growth opportunities should come from its purchase of smart-TV maker Vizio. 
WMT stock - WMT Stock Alert: Walmart Is Still a Blue-Chip That Will Keep You in the Green

Source: Jonathan Weiss / Shutterstock.com

Among blue chip stocks, few can match the investment returns and margin of safety provided by discount retailer Walmart (NYSE:WMT). Walmart stock is not only dependable and safe, it also provides a decent return on capital. So far in 2024, WMT stock has gained 26%.

WMT stock is up 35% in the last years. Its strong performance is due to financial results, grocery expansion, and e-commerce growth. This strategy has kept it ahead of rivals such as Target (NYSE:TGT), whose shares are up only 2% on the year.

Growth, Diversification and WMT Stock

With more than 10,500 stores, 2.1 million employees, and annual revenues of nearly $650 billion, Walmart has long been the world’s largest retailer.

However, the company is also the world’s largest company by revenue, the biggest private sector employer on the planet, and the largest grocery store chain in the U.S.

The company owes its success not only to its low prices but also to the fact that it has diversified in recent years to sell groceries as well as merchandise, and invested heavily to grow its online sales channel.

The result is that Walmart continues to post strong financial results and run circles around its competitors.

For this year’s first quarter, Walmart reported EPS of 60 cents versus 52 cents that had been forecast among analysts.

Revenue in the quarter came in at $161.51 billion compared to $159.50 billion that was estimated on Wall Street. Sales were up 6% from a year earlier. The company attributed the results to a rise in e-commerce sales.

Online sales at Walmart grew 22% year over year in Q1, driven by store pickups and delivery of online orders, as well as the company’s growing third-party marketplace.

In-person same-store sales rose 3.8%, while Sam’s Club same-store sales increased 4.4% year over year. Company executives said they’re also benefiting from a rise in advertising, with revenue from the global advertising business increasing 24% in Q1.

Stock Split and Vizio Deal

In February of this year, Walmart undertook a three-for-one stock split. News of the split sent WMT stock up to an all-time high. The company said it split the stock, in part, to allow more employees to buy into its stock purchase plan.

Walmart has been boosting employee benefits to inspire loyalty and retain talent. The company has increased store manager wages to an average of $128,000 per year and some managers are eligible for a bonus of up to 200% of their salary.

This was Walmart’s first stock split since 1999. In total, the company has executed 11 stock splits in its history. However, all previous stock splits were carried out on a two-for-one basis.

Beyond the stock split, Walmart is also in the process of buying smart-TV maker Vizio (NYSE:VZIO) for $2.3 billion.

Walmart’s offer to buy Vizio for $11.50 per share in cash is a bet on its fast-growing advertising business, called “Walmart Connect,” which earns $3 billion in annual ad revenues and saw sales rise 22% in the final quarter of 2023.

Buy Walmart Stock

Walmart has a lot going for it. The company’s share price is performing strongly and at an all-time high. Walmart’s push into groceries and focus on e-commerce sales are paying off.

It has a new catalyst in advertising, which it is capitalizing on with the purchase of Vizio.

Add in a stock split and a dividend that yields 1.24% and there’s plenty of reasons to be bullish on this leading blue-chip company. Walmart stock is a buy.

On the date of publication, Joel Baglole did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Joel Baglole has been a business journalist for 20 years. He spent five years as a staff reporter at The Wall Street Journal, and has also written for The Washington Post and Toronto Star newspapers, as well as financial websites such as The Motley Fool and Investopedia.

Article printed from InvestorPlace Media, https://investorplace.com/2024/06/wmt-stock-alert-walmart-is-still-a-blue-chip-that-will-keep-you-in-the-green/.

©2024 InvestorPlace Media, LLC