WMT Stock Report
2-Year Price History
Recent Price
(7/2 4:17PM)
-1.2%
$47.79
52-Week Price
$46.25 - $63.85
Market Capitalization
$186.2 Billion
Most Recent Dividend
$0.95
Ockham's Rating
At Ockham Research, we believe that there is extremely useful information to be gleaned from historical evidence. When a stock is out of line with historical norms it could definitely be a signal that it is overvalued or undervalued. But as proponents of the Efficient Market Hypothesis will tell you, the market is never wrong about stock prices because everything that can be known about a stock has already been priced in. However, in extreme cases, such as the Tech bubble in the early 2000’s or more recently the credit crisis demonstrates there are certainly times where historical evidence can be misleading. Episodes such as this do prove that times of great market correction either positive or negative can be driven by factors outside of fundamentals.
Over the last six months the NYSE has undergone a downturn somewhat, and because of this we view the recent high prices and those valuations at that price level a bit more cautiously. With that being said, we believe that although we are not yet upgrading this stock, if there is any further improvement in fundamentals there could be an upgrade in relatively short order.
Beginning with price changes, since our last report dated 06/27/2009 the price of WMT has decreased by 1.73%, but this does not greatly change our outlook on WMT.
Also, there have been no meaningful adjustments in earnings expectations to report in the last week.
WMT Stock Evaluation
Looking at WMT since last week, there has been little movement in price on a percentage basis. Additionally, there haven't been significant revisions to earnings estimates for WMT. Given this, we are maintaining our Undervalued rating. While there may not have been any meaningful changes in either price or earnings outlook, we still want to analyze where WMT is in relationship to its historical fundamentals. Looking at the ratios and multiples described below and throughout this report is the best way to evaluate the strength of WMT's current Undervalued rating.
WMT Revenue
As we have often noted, in our valuation methodology, "Cash is King." Well, it goes without saying that if a company cannot produce sales then there is no ability to generate cash flow. By that logic we look very closely at revenue numbers as our second most important factor in valuing a company's stock. We have established reasonable Price to Sales per share ranges based on historical data of the last 10 years. For, WMT the high and low end of the Price to Sales per share ratios are 0.77x and 0.58x respectively.
Notice that WMT's current Price to Sales per share ratio is 0.43x, which is quite a bit below what we consider a normal Price to Sales ratio for this stock. Given normal conditions and a price of $47.79, WMT is 37% below where we would expect to see it. This will beneficially factor into our final analysis of WMT as it is not often that this stock sinks to these levels.
WMT Cash Earnings
Looking at WMT specifically in their Cash Earnings capabilities, Ockham views WMT as significantly below their historical average multiples of Cash Earnings, as calculated by our proprietary analysis. It is incredibly important to understand that for WMT, the current level of Cash Earnings compared to its historical levels helps identify where WMT is in relation to what the investing community was willing to pay for this level of Cash Earnings in the past. With a historical high Cash Earnings per share ratio of 15.46 and a historical low Cash Earnings per share ratio of 11.74, an investor can relate where value becomes optimal.
So what does "significantly below" mean when we talk about Price to Cash Earnings numbers for WMT? From the Ockham perspective, we are looking specifically at WMT to see if the market is recognizing the huge disparity between WMT's past stock price to Cash Earnings ratio to today's levels. At a difference of 33% below the average historical Price to Cash Earnings ratio, our view would be quite positive at this point. However, as with all metrics, we need to also take other factors into account when looking at WMT. While we view better Cash Earnings metrics as very important, if the market is slow to identify this value, or if Cash Earnings were to fall from these levels, we would become more neutral in our stance.
WMT Dividends
When determining a company's future prospects for success, Ockham Research sees analysis of dividend payments as a key additional factor. Even though it isn't imperative for WMT to shell out a dividend in order to receive a positive rating, it can be helpful to further our analysis.
The estimated annual dividend for WMT is $1.09 producing a current dividend yield of 2.28%. Much like our evaluation of Sales and Cash Earnings per share, we review dividend yields from WMT against the historic high and low levels over all available dividend history. Because dividends are a decision made exclusively by management, we view a healthy and rising dividend as a sign of confidence and strength. The highest dividend yield from WMT over previous years was 2.36% while the lowest dividend yield was 0.37%. If you are looking for some “bang for your buck” then a dividend yield of 67.03% above the historical median should be enticing. WMT receives a positive boost in our view because as you know, equity at its core is simply a claim on future dividends.
The latest TV Media Discussion
“…12 to the $14 a gallon. This is decades in the these places will slowly decayed as gas prices go up and up. It will take years. WAL-MART, home depot, those types of things that anchor, will disintegrate as price cody: christopher, make some I don't know that you were necessarily making this point but essentially the cost of transportation, cost …” …more details…
“…Gallon gas. A bad out come is plunging revenues from gas taxes. Now he says $14 a gallon gas will revive u.S. Manufacturing and kill WAL-MART, but to roads will shut down because of high cost of driving. Cody: WAL-MART being killed is part of a good thing, tracy: i'm not, I need an suv, that's all I know. $20 a gallon means 90% of the americans live in that is a good thing according to steiner. …” …more details…
“…One other, I can think of, "fox business network.". Tracy byrnes you're up tracy: i'm always up all right, on tap, disney world and WAL-MART will disappear? Gas will be $20 per gallon? This will be a good thing? Our next guest will tell us why, on "happy hour." …” …more details…
“…Jobs is way higher than the actual number that are going to lose them. They are be having in an entirely different manner. They are not going to go to costco and WALMART, their jewelry departments are way down but other people's are way up. They have started to save money we have told them to save money. Now, they are saving money. That's a double whammy. …” …more details…
“…Like 12 or $14 per gallon. That is decades into the future. These places will slowly decay as gas goes up and up. It will take years. Target, WAL-MART, home depot, the places that anchor exurbia will disintegrate as price of gas goes up. Cody: chris, you make some I don't know that you are necessarily making this point. But essentially the cost of …” …more details…
“…One other I can think of "fox business network." work tracy byrnes you're up tracy: i'm always up on tap, disney world and WAL-MART will disappear? Gas will be $20 per gallon? This is actually a good thing? Our next guest will tell us why, on "happy hour." …” …more details…
“…Industrial, and the energy, the die trade, definitely hurting we're seeing strength in the the risk aversion is clear and pronounced. Staples leading the market higher. Names like coca-cola and WALMART among the best performers in the market here today. Another thing you that need to keep in the back of your mind is this down trend. We make a lot about weekly it is indeed going to go in the …” …more details…
“…We just learned a moment ago that wells fargo will honor the iou's. Supposing you take one of these to a store. I mean, will a store like a sears or whatever, a WAL-MART, will they honor an iou at 100% value? Do you know? >> I would -- I don't have the exact answer to that but given …” …more details…
“…Is the vast majority of americans do get their health insurance from their employers. That is a system that has been working for a lot of americans. I agree that the WALMART statement was incredibly here's a tremendous employer saying they think they can get on board with this. We are also very cognizant of most of the bills working their way through congress have …” …more details…
“…Deficit and wants to take the kind of actions that will eventually slow the growth rate of cost and bring the deficit down as we look forward. That is crucially important. >> when you talk about health yesterday WALMART made a very large measure in support of the white house, saying they support the employer-based model of but a lot of small businesses and large businesses came out …” …more details…
“…Please, blue chip, subjecttivity. 20 years ago, you would have been better off buying something really speculative and dicey like WAL-MART or mcdonald's or comcast than sotme blue chip stock delisted in the interim you never heard of now. Blue chip endangered spe circumstance some would say …” …more details…
“…Fest that the president has with the center for american progress and the unions and there is a huge pr for WAL-MART's on this. Charles: here is the thing. A lot of americans are worried about this and every day and on the upside we always hear 46 million americans don't …” …more details…
“…That is bad news. He also says we have a moral and economic imperative. I'm not sure about that. Free market society. I'm not sure about that one. And whoa, out of the blue, WAL-MART who has been antiunion, antihealth care, endorsed the plan. WAL-MART, trying to even the playing field they say. Next, car sales like you said earlier in the show. Ford, best in show, better than expected. They dropped only 14.4%. Gm was down 35. …” …more details…
“…Offer health insurance and fewer people are running to the emergency room to treat a common cold or other things. >> right. >> should be treated because costs will come down, we all know that. >> and WAL-MART already covers 52% of workers, wouldn't an employer mandate crush its competition, is that what you're hearing down on the street? >> well, I think that obviously, they're in it to make money and this is a way they can become …” …more details…
“…Affection comes excellence, you have to be realistic what your potential goal is. You're not going to do this >> adam. >> first of all, let's be realistic what WAL-MART's goals are, not lot offy as all. WAL-MART is trying to raise the expense for competitors, suggesting to the government that it forced businesses that are WAL-MART's size to do what WAL-MART already has agreed to do whether it's out of the goodness of its heart or because it's being pressured to by all the people who don't like WAL-MART they're a punching bag in this arena. …” …more details…
“…Usage and more prescriptions and of course, that's costing us about 800 billion dollars, that prescription program alone. So, you know, WAL-MART has lot offy ideals and I can understand why they're doing it and the henry ford model, they want their customers to afford their how it's going to play out to reduced health care costs. …” …more details…
“…And they don't want to see the country spending a lot more percentage of gnp on health care that we currently are and that takes away money we might otherwise spend at WAL-MART. >> you're never going to please all the people all the time. >> this is a huge endeavor. In the last hour we had peter …” …more details…
“…I think for health care reform to work, businesses as well as step up to the plate and work >> wendell, the question is, liz pointed out, WAL-MART employs more workers than the entire u.S. Army so it's the nation's biggest employer so the question, what is in it for WAL-MART, a trade concession, a relaxation of card check, the unions have been trying to unionize the work force, trying to become the biggest pharmacy benefits manager for medicare? What's in it for them, what do you think? …” …more details…
“…That the u.S. Chamber of commerce and business just like ama doesn't speak for all physicians, they don't speak for >> I think it's important to point out what may be great for WAL-MART is not necessarily terrific for businesses after smaller scale, but that said, the fact that WAL-MART would look at this and you know, they are all about the bottom line, they cut and slice and dice people down to their last dollar when they're trying to figure out suppliers and things like …” …more details…
“…Worry about deficits, the amount our government spends on medicare and medicaid will eventually grow larger than what our government spends today on everything else combined. >> many of WAL-MART's competitors disagree. The national retail federation says it's quote, faber gassed the company would change its position on a mandate that may force employers to cut jobs. >> what does it mean for companies not named WAL-MART, a former sigma executive and consultant for the center for media and democracy. What do you make of it, sir? >> well, I think that WAL-MART gets it. I think WAL-MART has taken a …” …more details…
“…The green and goldman sachs hitting the board. Back to you. >> stocks getting a boost today, nothing compared to the momentum that president obama's health care bill could be getting. We've got a guest ahead who says that WAL-MART is a game changer whether you like it or not. >> full coverage coming up on that and first running through the major indices on the first day of q-3, not bad at all if you're a bull. We have the dow jones …” …more details…
“…Investors react? We get you ready ahead. >> plus, president obama trying to ride the momentum of a big time shot of adrenalin for health care reform. WAL-MART is on board and he hits the roads and find out what other businesses not named WAL-MART say about this the latest on the debates coming up. >> you bailed out citi, but don't count on them to bail out they're boosting rates on customers and find out why they're doing it and how they're …” …more details…
“…Deduction. It's the core revenue that we put on the table. >> WAL-MART jumping on president obama band with a done saying it agrees it should offer the health care. Is that a game changer when company like WAL-MART says let's go for it? >> in the past few weeks there have been remarkable the healthcare insurance industry saying we want hospitals saying we want …” …more details…
“…4.5%. Watching consumer stocks doing well. A lot of the household fames are holding on as well. WAL-MART, the one name in the downside, dow component. Hearing that the employers should pay for health coverage. …” …more details…
“…We want to give you a jump on the news with a look at who's you've seen a lot on air today. Here are new ones we found. WAL-MART, johnson & johnson. At&t, united health are hiring. Earlier talked to broad view security and we continue our look at who's hiring with a look …” …more details…
“…Going to be the response of WAL-MART's direct competitors, the people that you basically represent. >> I really don't think you'll see a rush to follow WAL-MART in I think they're a true outliar and I think you'll see pushback from WAL-MART's competitors. >> stuart: what do you think they did this? >> well, from my standpoint, they've been under a lot of pressure for many years on healthcare benefits. You had the WAL-MART watch, you had the maryland case. I think they're trying to turn a page, steal a march and cozy up to the obama administration. That's not where the sweet spot …” …more details…
“…They're really out of step with the rest of the retail industry. And really the business community as a whole. >> stuart: do you think that -- two things here. Do you think it's possible that WAL-MART was kind of doing a deal with the obama administration saying, look, we'll go along with you on this you go along with us on card check, unionization. Do you think there's a possible …” …more details…
“…Pfizer's anti-smoking drug chantix. Thousands of patients recorded a range of problems from blackouts only $14 a share. WAL-MART decided to support a mandate that requires large companies to offer healthcare to all its employees. My next guest says he is flabbergasted at this. …” …more details…
“…I think the glory years of 16 million plus are not gonna be seen a while. They're adjusting fast. >> stuart: thanks indeed. Jessica caldwell. Thank you, jessica. Very surprising decision by WAL-MART leaving some politicians happy but a lot of other retailers shocked and follow that story for you next on "fox business." the dow is up 105 points. …” …more details…
“…California state controller john chang joins us just ahead. WAL-MART joins with the major union and joins government's call for all large employers to provide healthcare insurance. We'll get reaction from a retail group that's flabbergasted by what WAL-MART's done. If california and other states start issues iou's to welfare recipients and everybody else, can those people sue? Will they sue? We'll ask the judge. This is "fox business." …” …more details…
“…Different than a brokerage firm. >> what took them so long. >> they've always been doing WAL-MART has always been providing coverage to a lot of its employees. Some of them opt up. 52% are currently under the the other part of those employee based not taking the coverage, …” …more details…
“…Health care agenda, walg-mart are backing the president with a new policy and rebecca jarvis tells us what it not only means for WAL-MART but the competition >> a lot of analysts are calling this a win for WAL-MART in the court of public opinion and strategic advantage and loss for its competitors who will be playing a game of catchup if lawmakers require employer coverage. WAL-MART also provides health benefits for most of its employees, while the other retailers presently do not. >> WAL-MART's expense structure is designed such that the way the program that they are pushing forward were to happen, there wouldn't be an incremental expense to WAL-MART, it would be to a lot of other retailers because they are not generally paying health care benefits for part-time employees. >> the incremental expense to other retailers will be quite hefty. 80% of eligible for health benefits, meaning 40% more WAL-MART employees get health care benefits versus the average if others are asked to go the WAL-MART way it will cost an additional 4.5%. It is a cost they says they can afford to bear. WAL-MART may recoup coverage cost and income through the store pharmacies and clinics and analysts see it as a step to making better with the unions …” …more details…
“…We've been running in all our major manufacturing industries well below the natural replacement rate to keep the stocks of all these assets constant. >> WAL-MART is backing a plan and employer mandate to put employees into basically a low quality hmo plan. Why? Will they get concessions? Is it because they have a generic drug plan where they could replace pharmacy managers like med coor caremark into why is WAL-MART doing it? I think they want to wipe out the competition. They have 52% of employees covered by health insurance and not a lot of their competitors …” …more details…
“…>> retailers are higher, which are best for the second half? >> we have bad employment numbers out there. Em employment, stick with WAL-MART and leave the rest >> dennis is bearish about oil. Do you buy here? >> absolutely not. Too many resistance up here. There are being risk we ward …” …more details…
“…And the headline here really is that commodity costs are coming patty edwards, are you concerned perhaps the price hike they enacted on the consumer will have to be rolled back, given >> well, I know that WALMART and costco both talked about going back to suppliers that had commodity hikes last year and trying to get some of that back for the consumers now. Given that, maybe they have to give up a little bit -- the …” …more details…
“…Says they did receive reports of people who experienced these problems while they were still smoking, and taking these drugs >> got it. Mike huckman, thank you so much. >>> WALMART deciding to sign up for obama care, saying they support the president's plan for employer-mandated health it comes as the president prepares to hold a town hall at 1:15 eastern time today. WALMART's move. Is it good for business or not? Joining us now for the power grid debate, democratic strategist chris kasinis and trent did you havy. You guys get 20 seconds to make your case. Chris, we start with you. Because you used to be with wake-up WALMART. Does this make you change your mind about the company? >> well, it's tough to change. You know, I did that campaign for two-and-a-half years, so it's tough to change. But definitely I think it's -- I think what you're seeing from WALMART is realizization of both I think the political and policy reality that we are moving in reform is going to happen. They're jumping on the bandwagon, and I think it's a smart november from the company's perspective. It depends what they end up doing. Is this good for business when WALMART says they support employer-mandated health care? >> terrible. Bad for business, good for WALMART. WALMART is already doing this, so why should they lose by making their competitor match what they're doing. Also remember WALMART is a huge pharmacy, so they're acting like their phrma cousins, going to …” …more details…
“…Higher, as our dollar becomes >> we're going to watch it all unfold right here on cnbc, because it is going to be one of heck of a diagram a. Good to see >>> coming up next, a real stunner. WALMART says it's backing the president's plan to require employers to provide health one major business group says it is absolutely flabbergasted. Yeah, they used that word. Is WALMART's decision right for …” …more details…
“…So does the economy have enough muscle to support a rally the in markets? That for you coming up in just a moment here. >> then, here's agenda for this hour offul. On the power grid, a surprising decision by WALMART. Backing president obama's health care plan. But is it really good for >>> plus, who is hiring right well, kraft pizza company is. We'll speak with that company's president. …” …more details…
“…Some of the top stories we have been watching, general mills making new saying their profit nearly doubled. They upped their four-year view. We've been hearing about WAL-MART on the other hand -- this is all on the talk they are saying employees should pay for healthcare. Don't forget some managed care stocks are some in the red. …” …more details…
“…Coverage on the floor of the new >> oh, yeah. Green machine. So many of these names are in the green. Just a couple of dow jones industrial average components are lower. Pfizer, home depot and WAL-MART, each of those down less than 1%. We have a slew of winners. What I wanted to bring to your year to date we had some serious …” …more details…