Why We're Buying Wal-Mart

The video below is part of The Motley Fool's "11 O'Clock Stock" series where we're recommending a new stock every weekday at 11 a.m. ET on Fool.com for 50 weekdays. To see a video of co-founder Tom Gardner explaining the series, click here. To see our original recommendation of Wal-Mart (NYSE: WMT  ) , click here.

Motley Fool analyst Jim Royal went deep into the weeds looking for retail stocks ... and found a small, obscure, overlooked retailer named Wal-Mart. 

Kidding aside, Wal-Mart looks well-positioned to benefit from upcoming economic forecasts. Whether beset by inflation, deflation, or consumers continuing to retrench, Wal-Mart has the pricing power and scale to succeed even in the worst of economic environments. To see Royal's thoughts on the subject, watch the video, then read on below:

Royal says that when economic conditions worsen, Wal-Mart gains an advantage over less capable (but still formidable) rivals such as Target  (NYSE: TGT  ) , Costco  (Nasdaq: COST  ) . Not only that but it has grown its dividend by a remarkable 16% over the last five years and the yield currently stands at around 2.4%. Throw in international opportunities and Royal sees Wal-Mart as a retailer for all seasons.

Jim Royal, Ph.D.holds no financial position in any companies listed above. Costco and Wal-Mart are Motley Fool Inside Value recommendations. Costco is a Stock Advisor pick. The Fool owns shares of Wal-Mart and Costco. Try any of our Foolish newsletter services free for 30 days. The Motley Fool has a disclosure policy


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  • Report this Comment On August 24, 2010, at 3:16 PM, madmilker wrote:

    traitor...

    on Wal*Mart's China web page!

    "Walmart entered the Chinese market and opened its first Supercenter and Sam’s Club in Shenzhen in 1996. Currently, Walmart operates a number of store formats in China including Supercenters, Sam’s Clubs, and Neighborhood Markets. As of June 27, 2010, Walmart had 187 units in 99 cities, and created over 50,000 job opportunities across China.

    Walmart China firmly believes in local sourcing. We have established partnerships with nearly 20,000 suppliers in China. Over 95% of the merchandise in our stores in China is sourced locally. Meanwhile, Walmart is committed to local talent development and diversity, especially the cultivation and full utilization of female staff and executives. 99.9% of Walmart China associates are Chinese nationals. All our stores in China are managed by Chinese local talent. 43% of leaders at senior manager level and above are female. In 2009, the company established the “Walmart China Women’s Leadership Development Commission” for driving women’s career development."

    5% foreign in China....

    That is a slap in the face to all Americans...

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