Wal-Mart (WMT) is a US-based multinational retailer operating as a chain of discount department stores and a chain of warehouse stores. As of September 2021, the company has more than 10,500 offices worldwide. In addition, Wal-Mart is one of the largest private employers in the world with more than 2.2 million employees.
Wal-Mart has invested in its employees, including raising wages and providing benefits to same-sex partners. For investors, the company has outperformed the S & P 500 in the last few years, making it an attractive investment. For endangered investors, the top four benefits of investing in Wal-Mart in 2020 are:
- Wal-Mart’s focused expansion into emerging markets provides investors with some degree of stability in expanding their international portfolio by supporting well-known companies in these new Asian markets.
- Wal-Mart’s technology investment allows the company to remain relevant and profitable in the face of intensified competition from electronic retailers.
- Reinvestment in the company and shareholder returns through dividend increases are a strong message about the soundness of the company.
- With an average annual growth rate of 5.6% expected over the next five years and a year-to-year increase in dividend history since 1974, Wal-Mart is a wise investment.
Stability and brand name
At Wal-Mart, it’s pretty well known what investors get from an investment perspective. The company is a retail Jaguar notebook and continues to be the world’s largest revenue provider.
Over the next five years, Wal-Mart is expected to grow at an average annual rate of 5.6%. Stock prices aside, these forecasts and past performance continue to make Wal-Mart a stable company that should be considered a good long-term investment.
Approximately 75% of Wal-Mart store management began their careers as hourly employees at the company. This shows that the company is focused on retaining talent by investing in employee growth and business growth.
Dividends and reinvestments
For investors, Wal-Mart has done a great job of managing profit growth by using smart reinvestment strategies and returning to shareholders. Over the past 12 months, the company has reinvested over $ 10 billion in capital investment (CAPEX), paid over $ 6 billion in dividends, and repurchased over $ 4 billion in shares.
Wal-Mart has a track record of increasing annual dividends every year since it began paying dividends in 1974, with a dividend yield of approximately 1.7%. Wal-Mart has made approximately $ 15 billion in cash and short-term investments, providing additional opportunities for the company to reinvest and return capital to shareholders. All of these are good signs that Wal-Mart needs to continue to grow and add value to shareholders through capital gains and dividend payments, regardless of current equity performance.
Efforts focused on continuous innovation
The company is a major retailer, but it does a good job of keeping things slow. Wal-Mart has made progress towards the introduction of new technologies such as the “Scan and Go” app for iOS and Android.
The Scan and Go app is designed to provide a more efficient way for customers to shop, making Wal-Mart’s day-to-day operations more efficient. In addition, the company has invested in e-commerce to stop competition from Amazon, eBay and others. We are also testing new e-commerce strategies such as pickup lockers for online orders.
Over the last decade, emerging markets have achieved rapid expansion. The South Asian economy has tripled production since 2000, and the East Asian economy has grown from $ 3.3 trillion in 2000 to $ 11.2 trillion in 2010. These expansions into emerging markets not only allow businesses to achieve growth, but also allow them to diversify against recessions.
Due to these factors, Wal-Mart has endeavored to continue expanding globally. By investing in the company, you will be able to achieve international earnings and profit growth and share buybacks that are less affected by the global recession.