Wal-Mart (NYSE:WMT) is an American-based multinational retailer that owns and operates chains of huge department and warehouse stores. The company ranks the largest public corporation in the world in terms of revenue and the 18th largest public corporation in the world overall. Over the years, Wal-Mart has introduced innovative strategies that have helped it increase its share in the global market while also allowing it the leverage to penetrate into emerging markets such as India, China and Mexico. The company has performed impressively in the last three fiscal quarters, and this has reflected well on the business' financial indicators, earning it higher revenues and greater cash flows.
Wal-Mart has recently announced plans to tap into the massive social media and smartphones industry by hiring developers for its Silicon-valley project in India. The move is part of the company's plans to harness the tremendous power of social media and smartphones technology so that it can be used to attract shoppers. I believe that this is a good investment project that is certainly going to reap rewards for the business in the near future by generating higher revenues and greater cash flows.
The recent move by the U.S. retail behemoth to revamp its software platform will also assist the stock in softening cut-throat competition from online rivals. Wal-Mart is also strategizing aggressively on widening its competitive moat in the digital content market. The recent move by the company to add the DreamWorks title to video streaming is a strong indication that the business is serious about pushing for higher market shares in this particular market.
In terms of capital employed, Wal-Mart is a huge business with a total market capitalization of more than $206 billion and average trading volume almost touching 9 million. The stock's performance in the current month has been impressive, showing strong upward movement in the midst of favorable investor sentiment and an optimistic economic outlook. This has largely been the result of positive news that Asda's U.K. market share has risen to an all-time high with a growth rate in market shares of 7.8%.
Wal-Mart has also announced an impressive hike of 9% in dividend which has reaffirmed investors' trust in the positive and promising performance of the business. The stock has traditionally enjoyed a good dividend history, with a yield of 2.57% which exceeds industry standards. Moreover, the stock has an impressive price to earnings ratio of 13.63 and pays its investors $0.40 in dividends on earnings per share $4.54.
There are, however, certain developments that threaten to disturb the stock's recent upward movement. First of these is the dismal news on US jobs data which is suggestive of a dire economic repercussion. Weaker than expected growth rate in China and renewed fears in Spain over rising bond yields are two other major developments that may determine the stock's performance in the current financial year. However, Wal-Mart has shown astounding resilience against negative market forces thus far to post an impressive performance. This has largely been the result of the stock's defensive beta of 0.35 which means that it enjoys a wide competitive moat against its major competitors.
Costco (NASDAQ:COST) is the traditional rival of Wal-Mart, with a massive market capitalization of almost $38 billion and trading volume of more than 2 million. Costco's march in the previous fiscal quarter was impressive and reaped the business an increase in sales of more than 6%. The business has recorded healthy growth so far in the current year, with an increase of 6% in US sales, while international sales increased by 7%.
The stock is currently strongly poised at around $87, while there are strong implications that it will continue to grow, since it is currently trading at its highest price in the last 52 weeks. Price to earnings of $25.41 has been as impressive, and the stock pays its investors $0.24 in dividends on earnings per share of $3.45. With a dividend yield of 1.10%, I believe that the stock will continue to enjoy favorable investor sentiment. However, when analyzing the stock's financial indicators next to Wal-Mart's, I strongly believe the latter to be a safer and more viable investment option, especially looking at its amazing performance in the current fiscal quarter.
Target (NYSE:TGT) is another competitor of Wal-Mart that has posted an impressive performance in the current financial year. The stock has a market capitalization of more than $38 billion and an average trading volume of 5 million. Owing to favorable investor sentiment and promising market conditions, the stock has maintained a healthy dividend history with a dividend rate of $0.30 against earnings per share of $4.28. Trading price of the stock is currently poised at almost $57 while price to earnings ratio of 13.45 is as impressive. Although all these leading financial indicators seem unimpressive when set against Wal-Mart's recent financial performance, when judged independently, the stock's performance year-on-year is commendable. However, Wal-Mart is still a more attractive option for those investors seeking higher returns and security on investment.
Carrefour SA (OTCPK:CRERF) is the second largest global retail store after Wal-Mart in terms of capital and global market share. The stock has maintained the interest of investors with an impressive dividend yield of 9% and dividend rate of $1.56. However, the stock's financial performance in the previous quarters has been somewhat dismal when judged by industry standards. In the first fiscal quarter of this year, the stock ran a significant loss, even with a hike of 2.3% in sales volume.
As a result, market sentiment for the business is at a low recently, with investors looking at the stock warily. On the other hand, Wal-Mart's recent performance promises higher returns to investors and greater yields. Therefore, I strongly believe that it is a more lucrative stock in which to invest.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.