Wouldn't You Like To Be A Walton?

No, I’m not talking about the TV show back in the ’70s—there’s not too many of us that want to live on the side of a mountain without any air conditioning or many of the modern conveniences that make life a whole lot easier.

I’m talking about the heirs to the world’s largest retailer—Wal-Mart Stores Inc. (WMT)—that take up a whopping four places on the Forbes 400 list of the richest people in America.

The top three on the list are well known—Microsoft’s (MSFT) Bill Gates, Berkshire Hathaway’s (BRKA) Warren Buffett and Oracle’s (ORCL) Larry Ellison—but what you might not know is that No. 6 through No. 9 are all taken up by Sam Walton’s heirs:

At No. 6, Christy Walton is the richest woman in the U.S. and widow of John Walton. Her substantial investment in First Solar (FSLR) tanked this year, dropping some 75%, narrowing her lead above her brother-in-law.

Right on her heels is Jim Walton, the youngest son of Wal-Mart founder Sam Walton, and his siblings Alice Walton and S. Robson Walton. Collectively, the Waltons control just under half of the company, and their WMT shares are up more than 40% in the last year—pushing the family’s combined total wealth to just over $100 billion.

And this monster wealth shouldn’t be much of a surprise when you consider just how big Wal-Mart is. I’m a numbers guy, so here are a few statistics to put it into perspective.

  • With more than 10,200 stores across 27 countries, Wal-Mart has a footprint of one billion square feet—more than enough to cover all of the island of Manhattan.
  • If Wal-Mart was a country, its revenues would put it in the top 25 largest in terms of GDP.
  • A full 96% of the U.S.’s population lives within 20 miles of a Wal-Mart.
  • With over 2.2 million people employed by Wal-Mart, this big-box powerhouse has more men and women in uniform that the U.S. military.
  • Wal-Mart’s trucking fleet clocks in over 712 million miles every year—this is the equivalent of traveling to the moon and back 1,500 times.

So Wal-Mart is clearly a big company, and it also has solid profit potential.

In the second quarter, Wal-Mart’s earnings advanced 8% to $1.18 per share, topping the consensus estimate. And thanks to strong international sales and growing membership at its Sam’s Club warehouse, Wal-Mart also upwardly revised its 2012 earnings guidance to a range of $4.83 and $4.93 per share.

And because of its size and economy of scale, most retailers are hard-pressed to beat Wal-Mart’s rock bottom prices, so through the recession and gradual recovery the company was able to grow its sales and earnings each quarter and outperform its main rivals over the past year.

Also helping support shares are the company’s hefty $15 billion buyback program—of which there is about $7.9 billion left. In addition, the company’s dividend yield stands at 2.1%, and the company has been posting double-digit dividend increases over the past five years.

So despite the run-up that we’ve seen over the last year, I believe that there is still significant upside in Wal-Mart stock. For specific buy limits and all my most up-to-date advice on WMT shares, my Blue Chip Growth readers should head over to our Buy List.

Good night John-Boy!


Louis Navellier

Louis Navellier

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