NEW YORK ( TheStreet) -- Wal-Mart Stores ( WMT) continues be listed on the model portfolios of most of the major brokerage firms, and there is a good reason why. The company has had an unbroken string of revenue and earnings increases and is one of the most predictable stocks in which you can invest. Investors appreciate that this company controls costs through thick and thin. In the past year, shares of Wal-Mart have soared 37%, while the market, as measured by the Value Line Index, is up 10%. The chart below from Barchart says it all. Wal-Mart Stores operates stores under the Walmart and Sam's Club brands as well as the as walmart.com and samsclub.com e-commerce Web sites. Wal-Mart Stores also operates banks that focus on consumer lending.
Factors to Consider
Technical indicators provided by Barchart
A recent price weakness can signal a buying opportunity for those who have been sitting on the sidelines or want to add to their positions in stocks that are fundamentally sound. The weak 16% Barchart technical buy signal and a Trend Spotter sell signal could be what you've been waiting for. Although the stock is trading below its 20-day moving average, it is still above its 50- and 100-day moving averages. The stock fell 2.6% in the last month but was up 10.51% for the quarter and has increased by 36.5% in the past year. The Relative Strength Index is still above 50% at 50.63%, and Barchart computes a technical support level at $71.88. The stock recently traded at $72.62 with a 50-day moving average of $72.50
The 20 Wall Street brokerage firms that follow the stock have assigned 29 analysts to make recommendations. They project revenue will increase again this year by a rate of 5.70% and another 5.00% next year. Earnings are estimated to increase by 9.6% this year, an additional 8.9% next year and continue to increase annually by 8.4% for at least five years. The price-to-earnings ratio of 15.4 is marginally higher than the market P/E ratio of 15.0. The dividend of 2.20%, which is about one-third of estimated earnings, is right near the market dividend rate of 2.3%. The balance sheet is solid and receives an A++ financial strength rating. Wal-Mart continues to control costs and growth and looks to keep on track building new and smaller Wal-Mart Expresses.