However, WMT could be a superb investment because this $470 billion-revenue empire still has power in its fist. Its smaller neighborhood store format (management will open 270 this year) may eventually generate 25 percent of WMT’s retail revenues. Those stores are a big hit and popular among customers who replenish their pantries frequently. And WMT’s online revenue growth is impressive, growing 31 percent last year. Though e-commerce is only 2 percent of revenues, during the next decade, some believe e-commerce could generate 20 percent of revenues.
And WMT is entering the banking business with a nationwide rollout of GoBank, a checking account linked to a MasterCard debit card and offering other prominent features. WMT’s GoBank will certainly challenge the “good old boy” banking system and knock those grabby-greedy banksters on their bums. Last year, Wells Fargo, Bank of America, Fifth Third Bank and the like collected $31.6 billion in overdraft fees. And Fifth Third’s banksters really stabbed customers in the back with an exuberant $37 overdraft charge, though it permits customers to have 10 overdrafts a day. GoBank will eliminate these and other “rape” fees with which banksters bleed depositors to increase earnings.
Hold your WMT, and reinvest the dividends. In the coming dozen years, revenues may double, and earnings could triple. And the dividend could grow fourfold, to $7.68, or a 10 percent yield on your basis. But I haven’t the slightest idea what the share price will be.