Walmart (NYSE: WMT) may not be your first choice for a company that made its stockholders millionaires. It did exactly that. This top retail stock has returned 2,160% in 30 years, turning a $45,000 investment into just over $1 million. A good performance would please most investors. Can Walmart help you become a millionaire now? Let's examine the world's largest retailer.
Recent trends Economic conditions have been tough in recent years. Most firms worry about rising interest rates, inflation, and a recession. Walmart keeps running.
Recently, the company has had good financial performance due to its low prices. Revenue rose 6.7% in fiscal 2023 and 6% in fiscal 2024 (ending Jan. 31), higher than Walmart investors had seen in the prior decade. The company easily beat Wall Street projections for revenue and diluted EPS in Q4 2024.
Walmart remains strong in food and e-commerce despite consumers' shrinking finances. The company's longevity should reassure stockholders, especially during recessionary concerns. Walmart hiked their dividend 9% in 2024, as usual. Income-seeking investors will love the 51st straight payment increase.
Looking ahead No genuine danger to Walmart's supremacy. This business will last decades. Despite Amazon's ascent, it's survived. Walmart has the brand and scale to keep serving customers. However, investors should consider how much growth this company has left. Fair enough, Walmart opened 126 stores last year. Its Q4 global ad revenue rose 33%. Sam's Club warehouse memberships are at record highs.
In addition, the executive team wants to create an omnichannel retail business. This requires targeted supply chain and digital investments to effectively service customers. These moves should make Walmart more competitive in retail.
I doubt the company's growth will exceed historical patterns. The company's net revenues grew 3.1% annually and diluted EPS 1.7% over the past decade. A stock with that track record is unlikely to make a billionaire.
Return potential Given Walmart's market valuation of roughly $500 billion and fiscal 2024 revenues of $648 billion, its future investment returns are unlikely to match those of the past. Today, this company is mature. Also evaluate Walmart's valuation. Shares have a 31.3 P/E ratio. That matches its trailing-five-year average and exceeds its trailing-10-year average. Thus, the stock appears overvalued.
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