12-Month Net Income Growth: 12%
Quarterly Operating Profit Margin: 5.5%
Cash Flow Multiple: 7.7 (13% peer discount)
Analysts' Median Target: $61.05
3-Year Dividend Growth: 14%
Dividend Yield: 2.2%
Payout Ratio: 29%
2011 Catalyst: It may seem paradoxical to call the world's largest company a growth story, but Wal-Mart has the most effective distribution network in history, with the lowest-cost business model in its field, offering the highest-savings proposition to customers. Its stock has delivered annualized gains of 3.5% since 2007, excluding the effect of dividends. Quarterly return on equity, at 23%, bested the industry average of 19% and the S&P 500 average of 13%. An expansion into frontier markets is ongoing. A deal for a 51% stake in South African MassMart is pending. Quarterly international sales and international operating income increased 7% and 17%, respectively. Wal-Mart is beginning its next phase of domination. Bullish Scenario: HSBC values Wal-Mart at $68, suggesting a 25% 12-month gain. Bearish Scenario: Goldman Sachs expects the stock to rise 7% to $58 in the next year.