Company and Ticker Symbol
Walmart Inc. is one of the biggest companies operating in retail trade in the U.S. and worldwide. Walmart was established nearly eight decades ago by James Lawrence Walton and Samuel Moore Walton. The company is currently ranked in position one on the Fortune Global 500 list, a position it has held for the past 11 years.
The company’s main office is located in Bentonville, Arizona. For the local consumer market, Walmart has three market segments, including Walmart U.S. and Walmart International, which deals with operations in foreign countries. The Sam’s Club segment runs membership-only warehouse clubs. Walmart employs over 2.1 million people and generated over $611 billion in revenue for the year ended 2023.
Stock Price and Price-to-Earnings Ratio
The Price-Earnings ratio is a valuation measure based on a company’s earnings per share and its stock price. A company can be considered undervalued if its P/E ratio is low (below 10) but positive. The company is regarded as a valuable stock as it is profitable and may not post strong growth in the future. If it exceeds 30 or is negative, a company is considered to be in a growth phase, working toward achieving greater profitability. This indicates that the company is not generating sufficient earnings relative to its valuation. In 2023,
Walmart reported a P/E ratio of 24.6, which is high and suggests that the company may experience growth or become more profitable in the future. In 2021, the company reported a high P/E ratio of 50.4, the highest in the past five years, with a low of 20.7 in 2020. The company’s stock price has recently increased after Piper Sandler elevated its ranking from Neutral to Overweight, leading to a growth in Walmart’s valuation.
Stock Dividends and Yield
Walmart has been one of the companies that consistently pays dividends and is considered a Dividend Aristocrat. The company has continuously enhanced its annual cash dividend for nearly five decades. Dividends are paid four times yearly in January, April, May, and September.
Recent data indicate that Walmart paid a total dividend of $2.26 per share in the last year. Using the company’s stock price as of July 2023, the dividend yield is 1.43%. The company has reported a dividend growth rate of 2.01 percent over the past decade, which has decreased to 1.97 percent over the past five years. Overall, Walmart distributes 35 percent of its net earnings to shareholders and has consistently paid a reliable dividend of between $0.96 and $ 1.00 every quarter. In the coming year, the dividend yield is expected to increase by 2.23 percent.
Earnings per Share Ratio
Basic EPS represents the share of the net earnings or losses attributable to common shareholders for every basic share. For the period up to April 30, 2023, Walmart paid a basic EPS of $4.16, representing an 11.11 percent decline from 2022. In 2022 and 2021, the company’s EPS were $4.87 and $4.75, respectively. The trend in EPS signifies the net income generated for the years. The decline in EPS in 2023 was due to a decrease in net earnings from $13.9 billion in 2022 to $11.3 billion, while income increased by $0.2 billion from 2021 to 2022.
Revenue Estimates – Next 12 months
Walmart has implemented numerous measures to ensure the business continues to grow through improved sales performance. In 2023, the company generated a total sales revenue of over $611 billion, an increase from about $573 billion earned in 2022. As the company continues to invest in technologies across the supply chain and improve customer relations, Walmart is expected to increase its sales revenue to about $670 billion.
Revenue – Previous Three Years
Walmart reported total revenues of approximately $611 billion, up from about $573 billion in 2022, representing an increase of approximately $38 billion, or 7 percent. In 2022, the company’s revenue increased by about $13.6 billion, or 2.4 percent, compared to about $559 billion in 2021. Walmart (2022) reports that revenue increased due to improved sales in certain segments, attributed to the growth in average ticket and transaction numbers.
Statement of Cash Flows
For 2023, 2022, and 2021, Walmart generated net cash provided by operating activities of approximately $29 billion, $24 billion, and $36 billion, respectively. The 2023 increase was due to inventory purchases and reduced operating income and payments. The 2022 decline was due to increased inventory costs, purchases, and payments.
Walmart invested roughly $18 billion in 2023, $6 billion in 2022, and $10 billion in 2021. The change was due to divestitures of the company’s operations in the U.K. and Japan, as well as new investments. The cash flows from financing activities amounted to approximately $17 billion in 2023, $23 billion in 2022, and $16 billion in 2021. The amounts generally comprised various financing operations, including debts and stocks.
Average Trade Volume
Walmart began trading on the stock market in 1970 and has consistently listed its shares on the New York Stock Exchange (NYSE: WMT). In July, recent data from Yahoo Finance (2023) shows that the company’s trade volume reached about 5.6 million. The company has remained stable and attracts large transactions due to its attractiveness to investors. Walmart has immense future growth opportunities, and its stock remains one of the most competitive on the NYSE, as investors seek to capitalize on it. The growth of e-commerce presents untapped opportunities for the discount retail and wholesale giant, positioning it at an advantageous point in dealing with competition in the industry, thereby making its stock more valuable.
Analysts’ Recommendations
A high dividend yield indicates that a company is undervalued, while a low dividend yield indicates that a company is overvalued. Within the last 12 months, Walmart posted a dividend yield of between 1.57 percent and 1.43 percent, which can be considered an average measure. The measure indicates that Walmart stock is fairly valued and suitable for holding, given the business’s prospects for future growth. However, some may consider that the decline in dividend yield may not indicate a good time to buy the company’s Walmart stock.
Walmart’s stock price is currently $159.74. The 52-week high and low were $160.69 and $121.03, respectively. The stock price is estimated to trade at $154.66 in one year.
Market Cap for the Company
Market capitalization, often referred to as “market cap,” is a measure used to determine the size or value of a publicly traded company. It represents the total market value of a company’s outstanding shares of stock. Market capitalization is calculated by multiplying the current stock price by the total number of shares outstanding. Market capitalization is a crucial metric for investors and analysts, as it provides a snapshot of a company’s relative size within the financial markets. Walmart has a current market capitalization of $428 billion, indicating the total worth of the business, which can be categorized as a large-cap stock.
Outlook for Growth and Sustainability
Walmart is expected to expand and grow in response to increased consumer demand and a desire to shop. Business sustainability will be enhanced through an extensive and re-engineered supply chain network, which will improve customer fulfillment. Walmart seeks to invest in a more competent and integrated omnichannel network built on advanced software, data analytics, and automation.
The business will continue to grow due to investments in high-return areas, enhanced business mix, and incremental operating margins. Considering the growing business opportunities, Walmart is well-positioned to meet its financial objectives and is recommended for investment. The world has just emerged from the COVID-19 pandemic, and consumers are regaining employment that increases their disposable incomes and purchasing power.
References
Walmart. (2023). Walmart Investor Relations – Financials Investor Relations > Financials. Walmart. Web.
Yahoo Finance. (2023). Walmart Inc. (WMT) Stock Price, Quote, History & News. Web.