Oct 29, 2015

Buying Cheap Stuff - Walmart (10 shares, $19 dividend income)


Walmart is one of the world's largest chain of brick and mortar discount department stores with 2+ million employees. I do not know a state or any decent size town in the US which does not have a Walmart store in its vicinity and prices at all their stores are very competitive by most retail standards.

However in recent years especially with the popularity of online only stores and free shipping, it has been increasingly challenging for this retail giant to compete effectively. Their cost of doing business has increased especially with worker compensation increases and tighter profit margins from increased competition such as Target, Costco and Amazon.

I believe the retail sector is big enough to support a few major players in both the online and brick & mortar space and Walmart will slowly transition to find a balance in both medium. Currently it is at its 52-week low which makes it an attractive dividend payer of 3.4% with a good chance of appreciation. I'm adding some shares here and will wait for their company business to turn around while collecting decent steady dividends.

Related Market Commentary: Market still not giving Walmart enough credit (Morning Star)

This purchase will add $19/yr to the dividend income portfolio

Basic info:
Market CAP: 185B   EPS: $4.79   Dividend: $1.96 (3.41%)