I agree about the stocks on my watch list being those with perennially high valuations that just never seem to come back to fair value. Companies like LOW, HD, FAST, GWW, NKE and the like.
WMT is not one of those companies for me and I am still not interested even at the current low prices. WMT is facing huge headwinds of higher labor costs, increasing on-line competition, and a strong dollar. It hasn't shown growth for a few years now and I don't expect that to pick up meaningfully anytime soon. The dividend payout ratio has also gotten well over historical norms and as a result the last few increases have been just $0.01 per quarter. I see several more years of pedestrian increases until the payout ratio gets back down the historical 30% range.
I'm long TGT for my big box retailer. It supports a higher payout ratio than WMT, has a better recent history of earnings growth (Canada and credit card fiascos withstanding), and higher expectations for earnings growth going forward. I'm also long ROST for a higher growth/lower yield retail option.
WMT is not one of those companies for me and I am still not interested even at the current low prices. WMT is facing huge headwinds of higher labor costs, increasing on-line competition, and a strong dollar. It hasn't shown growth for a few years now and I don't expect that to pick up meaningfully anytime soon. The dividend payout ratio has also gotten well over historical norms and as a result the last few increases have been just $0.01 per quarter. I see several more years of pedestrian increases until the payout ratio gets back down the historical 30% range.
I'm long TGT for my big box retailer. It supports a higher payout ratio than WMT, has a better recent history of earnings growth (Canada and credit card fiascos withstanding), and higher expectations for earnings growth going forward. I'm also long ROST for a higher growth/lower yield retail option.