By Jim Woods of InvestorPlace

One of the greatest capitalist success stories ever is the emergence of

Wal-Mart

(WMT) - Get Report

, or formally referred to as Wal-Mart Stores Inc. Wal-Mart is the world's largest retailer. WMT stock got its start with Sam Walton in 1962 as just a mom-and-pop retail store in a small Arkansas town, now has managed to make its name synonymous with discount retailing.

For investors, the question isn't how well Wal-Mart has done in the past, but whether WMT stock represents a sound investment right now. The answer is yes -- and here are five reasons why you should buy WMT stock:

Wal-Mart earnings deliver:

In May, retail giant Wal-Mart Stores Inc. reported record fiscal first-quarter sales and earnings for the period ended April 30, 2010. Net sales in fiscal Q1 were $99.1 billion, an increase of 6% from $93.5 billion in the first quarter last year. Wal-Mart posted diluted earnings per share of 88 cents, firmly above the consensus estimate for EPS of 85 cents, and well above EPS of 77 cents in same quarter one year ago.

WMT stock has good Q2 guidance:

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Despite difficulties in the global economy precipitated by Europe's woes, Wal-Mart confirmed its second quarter earnings outlook, saying it expects to see EPS in the range of 93 cents to 98 cents, in-line with consensus forecasts.

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Wal-Mart dividend is sound:

On March 4, Wal-Mart announced it was increasing its annual dividend by 11% to $1.21 a share in 2011, from $1.09 per share paid during the fiscal 2010. The beefed up annual dividend of $1.21 will be paid in four quarterly installments of 30.25 cents a share. This high dividend yield is great for investors who are looking for a quarterly dividend check in addition to share appreciation.

WMT stock isn't overpriced:

Wal-Mart shares currently trade at price-to-earnings ratio, or P/E, of just over 13, and a forward PE ratio of 11.4, both well below retail industry averages. The shares also enjoy the widespread approval of analysts following the company. Of the 24 analysts who cover Wal-Mart, nearly 80% recommend the stock. Moreover, the mean analyst price target for the shares over the next 12 months is $62.21 -- a double-digit premium on prices as of this writing.

Wal-Mart cashing in on international growth:

While consumers in the U.S. are starting to spend more, the real growth action is overseas, particularly in emerging markets. Wal-Mart currently gets about 20% to 25% of its business outside the U.S., and that mix is growing by about 15% a year. The company continues expanding into red-hot markets like China, and that means increased revenue in the months and years to come.

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