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

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.

My Investments (that pay dividends)

Here’s a quick list of my dividend paying investments (stocks & ETFs).  Not all of these consistently pay dividends and some of these I invested in prior to my love of dividends.

LOYAL3 Account

– Disney (DIS)

– Hasbro (HAS)

– Coca-Cola (KO)

– Nike (NKE)

– Starbucks (SBUX)

– Apple (AAPL)

– Wal-Mart (WMT)

– Microsoft (MSFT)

– Anheuser-Busch (BUD)

– Intel (INTC)

 

Roth IRA Account

– Activision/Blizzard (ATVI)

– Apple (AAPL)

– Direxion Mid Cap Bull 3x Shares (MIDU)

– J.C. Penney (JCP)

– Procter & Gamble (PG)

– ETRACS Monthly Pay 2x Leveraged Mortgage REIT (MORL)

 

In the future I plan on investing more in stocks/ETFs that have consistent quarterly or monthly dividend payouts.