Wal-Mart (WMT) is largest retailer is US and has significant market share in the international market. They are more focused into the future growth and in maintaining their current market position. Change in the economic condition and growing competition in the retail market, makes it challenging for the retail players in maintaining their market share and revenue growth as per their expectation. These factors are adding more pressure to the margins and revenue of the company. WMT’s expected growth in the earnings per share and dividend for the 4th quarter was not promising, there was only 2% increase in the dividends per share and EPS has slightly decreased (Seekingalpha.com, 2014).These factors have direct impact on the stock price of
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Risk involved in investing in this stock is less because of lesser volatility. One important point to be noted in this regard is that WMT generally gives back more to their shareholders that is profit sharing with investors are high. This makes investors to gain more confidence to invest in this company. WMT is mainly suitable for long-term investment when compared to short-term as the growth in stock price is slow. The stock price of the company increases and stabilizes itself within the new range.
The future expected growth is about 3.59% for the year 2015 with 14.14 as its P/E ratio for the period (NASDAQ, 2014). Earnings per share are also expected to grow in the future which is a positive indication for future stock price increase. This stock will definitely provide for higher return and the minimum expected price during March 2015 will be above $82 per share as the current stock price is about $77. This is the minimum expectation as the future growth of the company is guaranteed. Other investment options are investing in the savings account which provides for 0.95% of annual return and the minimum balance required is $0 in GE Capital Retail Bank Optimizer plus (My Bank Tracker, n.d.). The CD rate for 12 month deposit with Bank of America is 0.08%for an investment of $10,000 investment (Bank of America, n.d.).
The investment return obtained from other investment options is too low when compared to purchasing the stock