Resolve to keep your portfolio healthy: Help us pick the worst stock for 2008.

The worst stock in 2008? Here's my guess: Wal-Mart (NYSE: WMT).

Its shares were trading recently around $45 apiece, not far from where they were way back in 1999 -- nearly a decade ago! Long-term shareholders may grumble less. Those who've held on for the past 20 years have enjoyed an enormous 15-fold increase in their investment.

Why am I grousing about this company? Here are a few concerns:

The company's annual revenues top $350 billion -- roughly a third of a trillion dollars! That's not far from the gross domestic product of Saudi Arabia. Why should size matter so much? Well, if a small retailer with $100 million in annual revenues wants to increase them by 10%, it has to generate an additional $10 million in sales. But for Wal-Mart to do the same, it would have to generate more than an additional $35 billion in sales -- which is more than companies such as Walt Disney (NYSE: DIS) and Coca-Cola (NYSE: KO) make in a year.

Then there's how the company compares with competitors Target (NYSE: TGT) and Costco (Nasdaq: COST):

Wal-Mart

Target

Costco

       

Quarterly revenue growth (year over year)

9.3%

11.4%

7.6%

Price-to-earnings (P/E) ratio (TTM)

15.6

14.64

27.07

Annual revenues per employee

$195,000

$180,000

$943,000

Gross profit margin (TTM)

24.2%

32.7%

12.4%

Data from Yahoo! Finance and Capital IQ, a division of Standard & Poor's.

Wal-Mart's revenues are growing slower than Target's, yet it's selling at a higher P/E ratio. Its gross profit margin trumps Costco, but is dwarfed by Target. Costco's revenues per employee tower over the rest of the field. So overall, Wal-Mart's numbers aren't the most compelling.

Wal-Mart has a relatively low-income customer base. When it tried to appease a wealthier clientele, it found it couldn't compete.

And then there's inflation -- in China. Some experts predict that it will cause the price of made-in-China products to rise in the coming year or two and put pressure on Wal-Mart to accept lower margins or pass on the higher costs by raising retail prices.

Wal-Mart is controversial, too. By itself, that isn't necessarily a bad thing -- but when many people protest a company, there might be reasons to think twice before investing in it. Wal-Mart has been criticized for not being generous enough with its employees, for example -- and there are 1.9 million of them, including 1.3 million in the U.S.

The upside
I'm not really the Wal-Mart pessimist I seem to be. It pays a respectable dividend of 1.84% after raising it 31% in 2007. And because of its power over suppliers, management can negotiate lower wholesale prices and pass the savings to its customers. I own some Wal-Mart stock because I expect it to perform well in years to come. But Wal-Mart is one stock to avoid in 2008.

At our CAPS service, 2,287 people view the stock bullishly, and 615 are bearish. What's your stance? Click in to see what folks think of it, and cast your own vote, too.

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Longtime Fool contributor Selena Maranjian owns shares of Wal-Mart, Costco, and Coca-Cola. Coca-Cola and Wal-Mart are Motley Fool Inside Value recommendations. Costco and Disney are Motley Fool Stock Advisor recommendations. Try any of our investing services free for 30 days. The Motley Fool is Fools writing for Fools.