WMT vs. COST, HD, MCD, PDD, LOW, AMZN, PSMT, TGT, DG, and DLTR
Should you be buying Walmart stock or one of its competitors? The main competitors of Walmart include Costco Wholesale (COST), Home Depot (HD), McDonald's (MCD), PDD (PDD), Lowe's Companies (LOW), Amazon.com (AMZN), PriceSmart (PSMT), Target (TGT), Dollar General (DG), and Dollar Tree (DLTR). These companies are all part of the "retail/wholesale" sector.
Costco Wholesale (NASDAQ:COST) and Walmart (NYSE:WMT) are both large-cap retail/wholesale companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, media sentiment, dividends, profitability, valuation, earnings, community ranking, risk and institutional ownership.
Costco Wholesale has a beta of 0.77, meaning that its share price is 23% less volatile than the S&P 500. Comparatively, Walmart has a beta of 0.49, meaning that its share price is 51% less volatile than the S&P 500.
Walmart has higher revenue and earnings than Costco Wholesale. Walmart is trading at a lower price-to-earnings ratio than Costco Wholesale, indicating that it is currently the more affordable of the two stocks.
Costco Wholesale pays an annual dividend of $4.64 per share and has a dividend yield of 0.7%. Walmart pays an annual dividend of $0.83 per share and has a dividend yield of 1.4%. Costco Wholesale pays out 30.3% of its earnings in the form of a dividend. Walmart pays out 43.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Costco Wholesale has raised its dividend for 20 consecutive years and Walmart has raised its dividend for 52 consecutive years. Walmart is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
68.5% of Costco Wholesale shares are held by institutional investors. Comparatively, 26.8% of Walmart shares are held by institutional investors. 0.2% of Costco Wholesale shares are held by company insiders. Comparatively, 46.5% of Walmart shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
In the previous week, Costco Wholesale had 34 more articles in the media than Walmart. MarketBeat recorded 90 mentions for Costco Wholesale and 56 mentions for Walmart. Walmart's average media sentiment score of 0.67 beat Costco Wholesale's score of 0.32 indicating that Costco Wholesale is being referred to more favorably in the media.
Costco Wholesale received 331 more outperform votes than Walmart when rated by MarketBeat users. Likewise, 71.96% of users gave Costco Wholesale an outperform vote while only 60.12% of users gave Walmart an outperform vote.
Costco Wholesale has a net margin of 2.73% compared to Costco Wholesale's net margin of 2.39%. Walmart's return on equity of 28.80% beat Costco Wholesale's return on equity.
Costco Wholesale currently has a consensus price target of $691.28, indicating a potential downside of 2.81%. Walmart has a consensus price target of $61.75, indicating a potential upside of 4.24%. Given Costco Wholesale's stronger consensus rating and higher possible upside, analysts clearly believe Walmart is more favorable than Costco Wholesale.
Summary
Costco Wholesale beats Walmart on 13 of the 21 factors compared between the two stocks.
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This chart shows the number of new MarketBeat users adding WMT and its top 5 competitors to their watchlist. Each company is represented with a line over a 90 day period.
This chart shows the average media sentiment of NYSE and its competitors over the past 90 days as caculated by MarketBeat. The averaged score is equivalent to the following: Very Negative Sentiment <= -1.5, Negative Sentiment > -1.5 and <= -0.5, Neutral Sentiment > -0.5 and < 0.5, Positive Sentiment >= 0.5 and < 1.5, and Very Positive Sentiment >= 1.5.
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