Head-To-Head Review: Wal-Mart Stores (WMT) and Its Competitors

Wal-Mart Stores (NYSE: WMT) is one of 18 public companies in the “Supermarkets & Convenience Stores” industry, but how does it compare to its competitors? We will compare Wal-Mart Stores to related companies based on the strength of its analyst recommendations, dividends, institutional ownership, valuation, risk, profitability and earnings.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Wal-Mart Stores and its competitors, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wal-Mart Stores 2 16 14 0 2.38
Wal-Mart Stores Competitors 290 1087 800 35 2.26

Wal-Mart Stores currently has a consensus target price of $86.77, suggesting a potential downside of 4.64%. As a group, “Supermarkets & Convenience Stores” companies have a potential downside of 0.13%. Given Wal-Mart Stores’ competitors higher possible upside, analysts clearly believe Wal-Mart Stores has less favorable growth aspects than its competitors.

Valuation and Earnings

This table compares Wal-Mart Stores and its competitors top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Wal-Mart Stores $485.87 billion $13.64 billion 21.87
Wal-Mart Stores Competitors $65.09 billion $1.78 billion 425.66

Wal-Mart Stores has higher revenue and earnings than its competitors. Wal-Mart Stores is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Risk and Volatility

Wal-Mart Stores has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Wal-Mart Stores’ competitors have a beta of 0.87, indicating that their average stock price is 13% less volatile than the S&P 500.

Profitability

This table compares Wal-Mart Stores and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wal-Mart Stores 2.60% 16.87% 6.61%
Wal-Mart Stores Competitors 1.35% 8.49% 3.52%

Institutional & Insider Ownership

30.1% of Wal-Mart Stores shares are held by institutional investors. Comparatively, 49.3% of shares of all “Supermarkets & Convenience Stores” companies are held by institutional investors. 51.4% of Wal-Mart Stores shares are held by company insiders. Comparatively, 30.1% of shares of all “Supermarkets & Convenience Stores” companies are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Dividends

Wal-Mart Stores pays an annual dividend of $2.04 per share and has a dividend yield of 2.2%. Wal-Mart Stores pays out 49.0% of its earnings in the form of a dividend. As a group, “Supermarkets & Convenience Stores” companies pay a dividend yield of 1.9% and pay out 55.9% of their earnings in the form of a dividend. Wal-Mart Stores has increased its dividend for 42 consecutive years. Wal-Mart Stores is clearly a better dividend stock than its competitors, given its higher yield and lower payout ratio.

Summary

Wal-Mart Stores beats its competitors on 10 of the 15 factors compared.

About Wal-Mart Stores

Wal-Mart Stores, Inc. is engaged in the operation of retail, wholesale and other units in various formats around the world. The Company operates through three segments: Walmart U.S., Walmart International and Sam’s Club. The Walmart U.S. segment includes its mass merchant concept in the United States operating under the Walmart or Wal-Mart brands, as well as digital retail. The Walmart International segment consists of the Company’s operations outside of the United States, including various retail Websites. The Walmart International segment includes various formats divided into three categories: retail, wholesale and other. These categories consist of various formats, including supercenters, supermarkets, and warehouse clubs, such as Sam’s Clubs, cash and carry, home improvement, specialty electronics, apparel stores, drug stores and convenience stores, as well as digital retail. The Sam’s Club segment includes the warehouse membership clubs in the United States, and samsclub.com.

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