Walmart Beats Earnings and Revenue. Is WMT An Inflation Stock to Buy?

Walmart Inc. (WMT) has had another great quarter as the store’s sales growth climbed over 43% year or year (YOY).  Revenue also came in hot at 2.7 vs. the 2.3% decline that was expected by analysts.  An interesting note is that much of the sales growth was from existing stores, versus new stores.  This means that the current market for stores has not been saturated and new stores will likely increase sales over time.

The exciting thing in the 1Q report is the increase in e-commerce sales that are up 37% from the same quarter a year ago.  Obviously, the Chinese Covid-19 virus caused people to stay in, but it does show that Walmart is breaking into the online sales market.  Personally, my wife, who is a HUGE Amazon user, has been increasingly using Walmart online to buy stuff.

Who is Walmart Inc.?

Walmart Inc. engages in the operation of retail, wholesale, and other units worldwide. The company operates through three segments: Walmart U.S., Walmart International, and Sam’s Club. It operates supercenters, supermarkets, hypermarkets, warehouse clubs, cash and carry stores, and discount stores; membership-only warehouse clubs; ecommerce websites such as walmart.com; mobile commerce applications such as walmart.com/appstore for android users; a digital music store called jet.com; and walmart.com/menswear.

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The company provides branded merchandise lines consisting of apparel, jewelry, housewares that include small appliances, electronics, home improvement, toys, and baby products; and financial services comprising check cashing and money transfers. It serves individual consumers, as well as small-, middle-, and large-sized business customers. The company also operates websites in various countries in the world to provide merchandise and offer various financial services. Walmart Inc. was founded in 1945 and is headquartered in Bentonville, Arkansas.

Is Walmart Stock A Buy?

Investors are now asking themselves if Walmart stock (WMT) is a buy.  The short answer is that Walmart stock is a good buy if you are looking for a solid performer that is recession and inflation-resistant.  The price range is currently consolidating and in an upward trend and currently breaking through resistance at $141. 

It currently 1.6%  dividend yield, which is about average for a blue-chip.  What I don’t like is the Price Per Earnings ratio (PE) which is 32.99. As a general rule, I like to see sub 25 for PE, so this makes the stock a bit expensive for my tastes.  That being said, if Walmart continues to build more online sales, then I think we could see the stock price rocket to new levels.

TickerWMT
CompanyWalmart
SectorConsumer Defensive
Price$141.92
Dividend Yield1.60%
Consecutive Div. Growth Years10+
Ex-Div. Date8/12/2021
Days Until Next Earnings Report89
Beta 3-Year0.53
YTD Return-0.70%
3-Year Return79.40%
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