WAL-MART STORES INC. $81 - New York symbol WMT

WAL-MART STORES INC. $81 (New York symbol WMT; Conservative Growth Portfolio: Consumer sector; Shares outstanding: 3.3 billion; Market cap: $267.3 billion; Price-to-sales ratio: 0.6; Dividend yield: 2.3%; TSINetwork Rating: Above Average; www.walmart.com) earned $3.9 billion in its fiscal 2014 third quarter, which ended October 31, 2013. That’s up 1.6% from $3.8 billion a year earlier. Per-share earnings gained 6.5%, to $1.14 from $1.07, on fewer shares outstanding.

Overall sales rose 1.7%, to $115.7 billion from $113.8 billion. Sales at the company’s U.S. stores, which supply 59% of the total, increased 2.4%. However, same-store sales fell 0.3%, as shoppers lowered their spending due to high unemployment and uncertainty over future health insurance premiums in the wake of the Affordable Care Act (or Obamacare).

However, sales at the international stores (29% of the total) gained 4.1%, excluding exchange rates. New locations in fast-growing markets like China and Africa should continue to offset slower sales in the U.S. Moreover, Wal-Mart could unlock some of its value by spinning off its Sam’s Club warehouse outlets (12%). This chain’s sales rose 1.1% in the latest quarter.

For all of fiscal 2014, the company expects to earn $5.11 to $5.21 a share. The midpoint of that range—$5.16— is up 2.8% from $5.02 in 2013. The stock trades at a reasonable 15.7 times the 2014 estimate.

Wal-Mart is a buy.

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