Walmart Stock Analysis – Is Walmart still a Good Investment?

Let’s cover a retail giant today… in fact, it’s the largest retailer in the world and largest corporate employer in the world with more than 2 million employees. And if you live in America, you can’t miss this name, Walmart. When it was expanding rapidly in the 1990s, Mom and Pop businesses across America feared its arrival in their small town. And yes Walmart was so good at what they did that they closed down way too many small businesses.  And it’s a potential company that we can invest in if the price is right. But before that, let’s check out their financials in depth in our Walmart Stock Analysis.

As always, my goals with this Walmart Stock Analysis is to keep things simple and straightforward with no bias. Remember to leave a comment at the end of this analysis if you find it helpful…

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Walmart Stock Analysis – Business Snapshot

Walmart Stock Analysis - Business Snapshot
Walmart Stock Analysis – Business Snapshot

Walmart rose the dominance with it’s ability to deliver quality products at the lowest cost to it’s customers nationwide and is widely known for it’s awesome distribution system. Although more efficient business model is now available today (aka via Alibaba), Walmart continues to dominate the brick and mortar space.


Walmart Stock Analysis – Earnings Per Share

Walmart Stock Analysis - 10 year Earnings Per Share History

Walmart Stock Analysis – 10 year Earnings Per Share History

As always, we look into their financials to understand and confirm if Walmart continues to dominate. In 2007, Walmart clocked in an EPC of $2.71. And in 2016, an EPC of $4.57. And through the last 10 years, it has been consistent and even through the 2008 subprime crisis, Walmart continues to power on. This 10 year EPS record is certainly something we want to see in companies and I would say Walmart is certainly looking good.


Walmart Stock Analysis – Debt Equity Ratio

Walmart Stock Analysis - Debt Equity Ratio
Walmart Stock Analysis – Debt Equity Ratio

0.55 D/E ratio is good – although I prefer something like 0.50 and lower. The slightly higher D/E ratio is acceptable. Walmart D/E ratio has remained constant throughout the past 10 years.


Walmart Stock Analysis – Return on Equity

Walmart Stock Analysis - 10 year Return on Equity Track Record
Walmart Stock Analysis – 10 year Return on Equity Track Record

Walmart’s return on equity has also been consistent for the past 10 year. Somehow looking at this is starting to give me more confidence in this company. I know that they are big but now it’s looking even better.


Walmart Stock Analysis – Operating Cash Flow

Walmart Stock Analysis - Operating Cash FlowWalmart Stock Analysis – Operating Cash Flow

Again, good growth in operating cash flow. Good company. Certainly not fast growth but it’s a growing matured company. The big question now… what price is Walmart worth it?


Should You Buy Walmart Stocks?

Fundamentally, Walmart looks good but that does not mean we go rushing out to buy a good stock at any price. We want to make sure that it’s undervalue before we get involved. This is important for long term success in your investing journey. Let’s calculate Walmart’s valuation…

Walmart Stock Analysis - Should You Buy Walmart Stocks?Should You Buy Walmart Stocks?

At the point of this writing, Walmart is trading at $66 which is just slightly above valuation. Anything below $65 is a buy for us. Of course, you are still the main captain to pull the trigger of your financial ship.

Decide well and Good luck! Also, please leave a comment below as I love to hear from you.

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