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.