Walmart (WMT +0.81%) has dazzled the markets over the past few years as the retail giant continues to steadily grow its business and become a real player in e-commerce. Walmart stock is up 179% over the past three years, crushing the S&P 500's 77% gain.
The company is scheduled to report fiscal 2026 fourth-quarter earnings (for the period ended Jan. 30) on Feb. 19. Should you buy the stock now?
Image source: Walmart.
America's favorite retailer
Walmart has 4,600 stores throughout the U.S. and 10,800 stores globally, giving it incredible leverage in supply chain and pricing power. It's still expanding, and it's constantly revamping its model to reflect changing trends.
Although Walmart had fallen behind in e-commerce, it's investing in digital channels, and e-commerce has been on the rise. Sales increased 27% year over year in the third quarter globally, driving a 5.8% increase in total sales. It uses its stores as distribution hubs, which makes delivery quicker and cheaper, and it also provides more flexibility for customers, who can choose to pick up digital orders in stores.
Another advantage of widening its e-commerce business is reaching beyond its typical mass consumers. As a web presence, Walmart can also attract a more affluent consumer base that isn't necessarily coming into its stores, and it can stock a wider array of merchandise than it can keep in its brick-and-mortar locations. It's also finding other ways to grow its business, such as advertising, which grew 53% in the third quarter.
Not only has Walmart been able to keep up its momentum, but it also got a thumbs-up from the market last year for its resilience amid higher tariffs. Because of its diversified supply chain and size, the company can work with suppliers to lower costs as tariffs rise. It's also highly reliant on domestic products, which shields it from a major impact, and Walmart has been reporting higher profitability.
NASDAQ: WMT
Key Data Points
Dividends and valuation
Walmart is a Dividend King, and it has raised its dividend annually for the past 52 years; the streak should increase to 53 with an announcement the near future. Because yield moves in contrast with stock price, Walmart's dividend yields only 0.7% at the current price. But it's reliable and growing.
The stock trades at a P/E ratio of about 45, which is about its highest over the past three years. That's a hefty premium for a non-tech, slow-growing stock. But the market is prizing its resilience and stability at a time when it's worried about changing trends in technology.
If you're looking for a solid value stock that can protect your portfolio over the long term, Walmart is a great choice at any time. There's a chance the stock will jump after earnings, but the price leaves little room for error.
