WMT: Buy The Low Price Leader In An Inflationary Environment


Retailing behemoth Walmart (WMT) reported 4Q21 earnings before the open Thursday. Walmart US same store sales excluding fuel were +5.6% and EPS of $1.53 was +10% compared to a year ago. WMT guided 2022 comps to slightly above 3% and EPS to up mid single digits.

WMT is a cash machine that uses its cash in a shareholder friendly way. In 2021, it bought back nearly $10 billion in stock and paid more than $6 billion in dividends. The share buybacks shrunk the diluted share count 1.6% from a year ago and the stock yields 1.58%.

WMT is not the most exciting stock in the world but it sells the stuff people need at the lowest price at a time when every dollar counts for many Americans. At 20x forward EPS, it’s also a good value. For these reasons, the stock is going higher.

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