- Walmart and Amazon are both retail giants with highly-prized stock
- Walmart is struggling to increase revenue, due to excellent performances in past years
- Amazon may be at the top of the cycle, with Jeff Bezos cashing out a large number of shares
Retail stock is always popular with investors. It is a trend that is expected to continue into 2020.
This is an industry that generally brings in bring profits. The best companies have clear strategies and huge, loyal customer bases.
So, buying shares in a retail firm is a good idea. 2019 was a great year for the likes of Costco and Target. There are a couple of other big names in the industry you might be interested in.
What to Avoid?
A mistake commonly made by new investors is to only choose companies that they know and like. For instance, you might only want to invest in the supermarket where you shop or the place where you get your new clothes from.
This seems to make some sort of sense. After all, you would be putting your money into a brand that you like and that you know is popular. You might even be able to spot trends such as a drop in quality or staff getting made redundant.
However, it also misses out some of the most basic principles of stock market investing. You need to understand more about what is going on behind the scenes too. Do they have a solid multi-channel strategy? What are their future growth plans based on?
The Current Size and Revenue of Walmart
This retail giant was the world’s biggest retailer until recently and is still the largest private-sector employer. They posted profits of $3.8 billion early in 2019, with revenue of $514 billion.
· Walmart has close to 12,000 stores around the planet, with over 4,700 of them in the US. 2.2 million employees
work for them.
· It is still controlled by the Walton family, relatives of Sam Walton who founded it in 1962.
· Walmart was been on the New York Stock Exchange since 1972, using the WMT ticker.
· The US has always been their stronghold.
· Some of the other countries where Walmart has seen success are the UK, Canada and China, while they have made
in-roads in Latin America.
· On the other hand, they failed to make profits in South Korea and Germany.
The Walmart Share Price
At the time of writing this, the price of Walmart stock is a little over $116. In the last year, it has crept up to close to $120 and has dropped as low as $95.58 at the start of 2019.
This stock has been under-performing the market in the last few months. They still have huge amounts of sales, but are struggling to increase their revenue. The likes of Amazon and Target are eating into their base. There is also a worry that the
trade war with China will damage their profit margins.
On a positive note, they have made good progress on e-commerce sales. It is also worth noting that they have increased their share dividend every year since a $0.05 dividend for each share was announced in 1974. In 2019, each quarter brought a
The Current Size and Revenue of Amazon
For the third quarter of 2019, Amazon reported revenue of $70 billion and net income of $2.1 billion. Earnings per share
were listed as being $4.23. Sales were up 18% around the planet and 24% in North America. These figures were better than expected on revenue but lower on earnings per share.
For the fourth quarter on 2019, earnings per share rose to $6.47 per share. Revenue rose to $87.44 billion. These figures were higher than expected and cause the share price to rise sharply.
· The company started out in 1994, when Jeff Bezos launched it from his garage.
· He is now the richest person on Earth, with a net worth of over $125 billion.
· At the start of 2019, they stated that they had 288 million square feet of premises of different types.
· Half of the money spent online in the US goes to this company.
· You may have noticed at the start of 2019 that Amazon became the planet’s biggest company in terms of market value.
This was when they overtook Microsoft by reaching a value of $797 billion.
The Amazon Share Price
The incredible success story of Amazon can be seen with a look at its share price. At its IPO in 1997, each share was available for $18. Its first day on the NASDAQ ended at $23.50.
The current price of AMZN stock is over $2,077. This is its highest ever value. A year ago it was just under $1,600.
An interesting story in the news just now is that Bezos has sold $3.5 billion worth of shares in just four days. He sold 3% of his holding in the company after news of record-breaking profits saw the price rocket.
It now a trillion-dollar company and the question is where it will keep climbing. The underlying signs all point to a strong, forward-looking business with a solid plan. Many experts have been urging people to buy AMZN for some time now.
One worry is that Bezos might have spotted that the stock is at the top of its cycle. He used to work as a portfolio manager and it is possible that he has chosen the perfect time to cash out part of his holding.
Retail stock will remain an interesting type of investment this year. Walmart appears to be the safest and steadiest option of the two, as it is currently on the low side with room for improvement.
Amazon stock has rocketed to an all-time high. This causes the concern that the only way is down. However, their incredible success story in the past means that we certainly can’t rule out even higher prices later in 2020 and beyond.