Ten Spot Friday – 3 Reasons for Wal-Mart (WMT)

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After writing about how I wimped out during a recent opportunity to be frugal, I decided to set a small, achievable goal this week.  I cut out spending on energy drinks, convenience store snacks, and iced coffees this week.  To reward myself, I’ll drop a Ten $pot at Loyal3 today.  I have 3 stocks on my radar: K, MCD, and WMT.  I’ve recently added some K and MCD so I’ve decided to give WMT a $10 boost.  Here’s 3 reasons why:

 

#1.  Buffett’s Advice: Understand the company and find an economic moat

I understand Wal-Mart because I’ve dropped uncountable sums of $$$ there over my lifetime.  Wal-Mart also has a huge “moat”.

Here’s a quick snippet from Wal-Mart’s website to back it up:

“Each week, more than 245 million customers and members visit our nearly 11,000 stores under 71 banners in 27 countries and e-commerce websites in 10 countries. With fiscal year 2014 sales of approximately $473 billion, Walmart employs 2.2 million associates worldwide.”

Wal-Mart was also ranked #1 on the 2014 Fortune 500 list.  I suppose I could go on about Wal-Mart and Sam Walton’s success but I won’t.

 

#2.  Dividend Aristocrat

WMT is a Dividend Aristocrat that has increased its dividend payout for 39 years!  The current yield is about 2.5%.

 

#3.  It’s a deal?

Determining if a stock is a good deal seems to be a little bit like black magic with some stats behind it.  I’m trying to learn how to evaluate stocks but I’m not a professional so take this with a grain of salt.

– Current P/E is 15.7 versus a 5-year average of 14.3.  This is higher than I’d like to see but WMT’s P/E is still below the industry average of 17.3 and S&P’s 18.6. (Stats taken from Morningstar)

– Its current payout ratio is between 30-50% depending on where you look.  Still a good range for me.

– WMT’s stock price is almost 6% below its 52-week high.  Not necessarily a clearance price, but still decent given that many stocks are at or near high points right now.

 

So there you have it.  3 reasons I dropped $10 on WMT using my Loyal3 account.  Have a wonderful 4th of July for those of you in the U.S.

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5 thoughts on “Ten Spot Friday – 3 Reasons for Wal-Mart (WMT)

  1. I am also considering another buy with Walmart this month in my loyal3 portfolio. That is great that you were able to cut those expenses in order to add to your portfolio. Even the smallest amount is better than nothing and will accumulate over time. I would like to see how many shares of each stock you have on your portfolio. Any plans on updating your portfolio page? Just curious. Thanks for sharing!

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    • $10 isn’t much but it is more than I was investing last year. I might eventually show the number of shares. Right now, most of my holdings are fairly small so there isn’t much to share. Thanks for the following!

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  2. Pingback: Sunday Morning Reading: July 6, 2014 | Starting From Zero
  3. I love the small goals you set! That’s a great idea, and a great way to reward yourself. I’m not investing in stocks yet, but I do think that investing in what you know is a smart approach. Or at least, one I’d feel more comfortable with! Even though Wal-Mart is the bane of some people’s existence, there’s no denying how popular it is.

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