Tales Of This Dividend Champion’s Demise Are Greatly Exaggerated

Posted On October 14, 2016 8:15 pm

An excellent EV to EBITDA ratio shows Wal-Mart’s appeal.

The company was rapidly growing EBITDA until 2014, but temporary weakness coupled with a lower multiple created buying opportunities.

Due to the importance of a strong buyback program, investors need to look at the “per share” metrics.

For all the competitive threats Wal-Mart faces, their revenue and earnings per share remained solid.

Wal-Mart (NYSE:WMT) is cheap. Regardless of how you value that dividend champion, the price should be very attractive. There is an illusion that Wal-Mart is doomed. Investors are terrified of holding the next Sears (NASDAQ:SHLD). I understand the concern. No one wants to hold the next Sears. However, there is little comparison between Wal-Mart and Sears beyond being large retailers. As Mark Twain would say, “The reports of my death are greatly exaggerated.”

On a fundamental level, Wal-Mart remains strong and shares remain exceptionally cheap.

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