Comparing Wal-Mart Stores (WMT) and Its Competitors

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

Insider and Institutional Ownership

30.2% of Wal-Mart Stores shares are owned by institutional investors. Comparatively, 49.4% of shares of all “Supermarkets & Convenience Stores” companies are owned by institutional investors. 51.4% of Wal-Mart Stores shares are owned by insiders. Comparatively, 30.1% of shares of all “Supermarkets & Convenience Stores” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Volatility & Risk

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’ peers have a beta of 0.87, indicating that their average stock price is 13% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings for Wal-Mart Stores and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wal-Mart Stores 2 16 14 0 2.38
Wal-Mart Stores Competitors 289 1086 798 35 2.26

Wal-Mart Stores presently has a consensus target price of $86.08, indicating a potential downside of 5.33%. As a group, “Supermarkets & Convenience Stores” companies have a potential downside of 1.11%. Given Wal-Mart Stores’ peers higher possible upside, analysts plainly believe Wal-Mart Stores has less favorable growth aspects than its peers.

Profitability

This table compares Wal-Mart Stores and its peers’ 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 1.64% 9.31% 3.62%

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 52.8% of their earnings in the form of a dividend. Wal-Mart Stores has raised its dividend for 42 consecutive years. Wal-Mart Stores is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Earnings & Valuation

This table compares Wal-Mart Stores and its peers gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Wal-Mart Stores $485.87 billion $13.64 billion 21.86
Wal-Mart Stores Competitors $65.09 billion $1.78 billion 402.66

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

Summary

Wal-Mart Stores beats its peers 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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