5 Resilient Retail Stocks For An Uncertain Market
One indicator of increasing consumer confidence is rising retail sales. The largest retailer in the United States and globally is Wal-Mart (WMT) with a market capitalization of about $224 billion. The stock trades at around $66 per share. My purpose here is to analyze Wal-Mart and a few of its close competitors with a focus on revenue growth. Through this prism, we hope to arrive at some conclusions with regard to a correlation of consumer confidence to share price. I’ll review key fundamentals for Wal-Mart and selected rivals. I will also offer up any relevant positive or negative catalysts.
Wal-Mart has a value leaning price to earnings ratio of 14.10, but the price to earnings growth ratio of 1.61 paired with a price to book of 3.23 diminishes it somewhat as a value stock. That said, Berkshire Hathaway (BRK.A) now holds around 47 million shares of Wal-Mart in its portfolio. Return on equity is above average at 23.49%. Wal-Mart’s quarterly year-over-year revenue and earnings growth are 8.5% and 10.1% respectively. Debt to equity is 73.43 and the current ratio is 0.83. Wal-Mart pays
shareholders a dividend yielding 2.3% with a payout ratio of 32%. Wal-Mart is expanding its Wal-Mart Express concept and planning to open more of the stores which are a combination of a grocery, pharmacy and convenience store. The initial 10 stores moved to profitability inside of 12 months. I see this as a positive catalyst for revenue and earnings growth.
Costco (COST), a close rival, has about a $37 billion market cap and trades at around $86.To continue reading, click here.