[Stock Advisors] Wal-Mart - The stock deserves 'some love'

Wal-Mart (WMT) deserves some love. Yes, I know the stock is trading where it was 10 years ago. I know lots of people? view it as the quintessential ��evil�� corporation.

I know it��s hard to grow a company with revenues near one-half trillion dollars. But I also know that the stock is beginning to put on one of those ��stealth�� rallies that investors ignore at their own peril.

The stock is closing in on its 52-week high of $57.90, and I think these shares will eclipse that level before year-end.

And investors get paid nicely while they wait for a stock breakout, as the issue yields 2.6%. It��s time to put Wal-Mart stock in your shopping cart.

There��s no denying Wal-Mart is a behemoth. The company accounts for approximately 11% of U.S. retail sales. If Wal-Mart? were a country, its annual revenues would make it among the top 25 national economies in the world.

Despite its gargantuan size, Wal-Mart has been able to grow pro?ts and revenues every year for the last decade, a feat that seems to be ignored by investors who clamor for even more growth.
To be sure, Wal-Mart��s U.S. same-store sales �� a popular measuring stick for retailers �� have declined for nine straight quarters. Still, Wal-Mart may be in the process of reversing the downward trend in U.S. same-store sales.

Monthly same-store sales have increased in July, August, and September, so there is hope that the quarter ended in October will show a slight improvement in same-store sales.

The ?rm has been able to offset sluggish U.S. sales by expanding overseas. International sales rose 12% in ?scal 2011.

Wal-Mart has outlets in such growing economies as Brazil and China. The company recently acquired a 51% stake in Massmart, a retailer in 14 African countries.
Wal-Mart��s valuation is reasonable. The stock trades for less than 13 times the ?scal 2012 earnings estimate of $4.49 per share.

Wal-Mart has beaten the consensus estimate in each of the last three quarters, so the current ?scal year estimate may prove conservative.

Dividend investors should take heart in the ?rm��s willingness to boost the payout at a rapid clip. Indeed, the dividend was increased roughly 21% at the beginning of this year and has more than doubled since 2006.

Wal-Mart typically boosts its dividend early in the year, so look for another double-digit increase in early 2012.

Wal-Mart ?ts the pro? le of stocks that should hold up well in this market �� large, dividend-paying stocks that are trading at reasonable valuations and have some operating momentum.

Investors should consider nibbling at current prices and use any dips to add more aggressively to positions.

Wal-Mart offers a direct- purchase plan whereby investors may make their initial investment directly from the company. Minimum initial investment is $250. Worth noting is the IRA option available in the company��s plan.