Wal-Mart's Recent Weakness Masks Long-Term Strength

Wal-Mart (WMT) is the world's largest retailer. The company is focused on low prices resulting from operating efficiencies driven by economies of scale. Wal-Mart serves 245 million customers each week from over 11,000 locations in 27 countries. Wal-Mart posted first-quarter constant currency adjusted sales growth of 2.1%. The company's growth has slowed over the last several years, as the US market has neared saturation for Wal-Mart stores. There is simply not as much room for growth in the company's dominant market as there was in years past.

Wal-Mart is a high-quality stock that is highly resistant to recessions. The company's management has a long history of rewarding shareholders through both share repurchases and dividends. Wal-Mart appears to be undervalued compared to the overall market at this time, and has solid if unspectacular growth prospects going forward. The company is ranked as a Top 10 Buy, based on the 8 Rules of Dividend Investing.

Source: Seeking Alpha

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