Benefits of Investing in Walmart

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Evan Tarver
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Evan Tarver has 6+ years of experience in financial analysis and 5+ years as an author, editor, and copywriter.
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Updated September 30, 2021
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Thomas Brock
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Thomas J. Brock is a CFA and CPA with more than 20 years of experience in various areas including investing, insurance portfolio management, finance and accounting, personal investment and financial planning advice, and development of educational materials about life insurance and annuities.
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Timothy Li
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Timothy Li is a consultant, accountant, and finance manager with an MBA from USC and over 15 years of corporate finance experience. Timothy has helped provide CEOs and CFOs with deep-dive analytics, providing beautiful stories behind the numbers, graphs, and financial models.
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Walmart (WMT) is a U.S.-based multinational retail corporation that operates as a chain of discount department stores and a chain of warehouse stores. As of Sept. 2021, the company has over 10,500 locations across the globe. Additionally, Walmart is one of the largest private employer in the world with over 2.2 million employees.

Walmart has made investments in its employees, such as increasing wages and offering benefits for same-sex partners. For investors, the company is an attractive investment, as it has outperformed the S&P 500 over the past few years. For investors on the fence, the following are the top four benefits of investing in Walmart.

Key Takeaways

  • Walmart's focused expansion into emerging markets provides investors some stability as they grow their international portfolio by backing a well-known company into these newer Asian markets.
  • Technology investments made by Walmart allow the company to remain relevant and profitable in spite of increased competition from e-retailers.
  • Reinvesting in the company as well as giving back to shareholders via increasing dividends provides a strong message regarding the health of the company.

Stability and Brand Name

With Walmart, it is pretty well-known what an investor is going to get from an operational perspective. Walmart remains a stable company that should be viewed as a long-term blue-chip investment.

Roughly 75% of Walmart's store management began their careers as hourly employees with the company. This shows the company's focus on retaining talent by investing in employee growth as well as growing the business.

Dividends and Reinvestment

For investors, Walmart has done a great job managing its increasing profit, using a smart reinvestment strategy, and giving back to shareholders. As of Jan. 2020, the company has reinvested over $10.7 billion in capital expenditures (CAPEX), paid out $6 billion in dividends, and bought back over $5.7 billion in shares.

Walmart has a track record of increasing its annual dividend every year since it started paying a dividend in 1974, and its dividend yield is roughly 1.55%, as of Dec. 2021. As of Jan 2020, Walmart sat on almost $9.5 billion in cash, providing additional opportunities for the company to reinvest and return capital to shareholders. These are all good signs that regardless of current stock performance, Walmart should continue to grow and add value to shareholders through capital gains and dividend payments.

Focused Effort on Continuous Innovation

While the company is a retail giant, it has also done an admirable job ensuring it is not slow-moving. Walmart has made strides to introduce new technologies, such as a "scan and go" app for iOS and Android. 

The scan-and-go app is designed to offer customers a more efficient way to shop, and also makes Walmart’s daily operations more efficient. Additionally, the company has been investing in e-commerce to stave off competition from the likes of Amazon and eBay. It also rolled out emerging e-commerce strategies such as pickup lockers for online orders.

Article Sources
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  1. Walmart. "Location Facts."

  2. Walmart. "Company Facts."

  3. Walmart. "2020 Annual Report," Pages 32,40.

  4. Nasdaq. "WMT Dividend History."

  5. Walmart. "2020 Annual Report," Page 52.

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