Should You Invest in Walmart Today?
Shares of retail titan Wal-Mart are down today after the company announced first-quarter earnings. Wal-Mart missed analyst expectations of $1.15 in earnings per share by reporting $1.10, and it only made $114.7 billion this quarter versus expectations of $116.27 billion. Like many of its peers, the company blamed bad weather for the underperformance, but investors aren't pleased with that answer.
On top of all that, Wal-Mart released a statement that the company is OK with raising the minimum wage in the U.S. A higher minimum wage presents an interesting dilemma for Wal-Mart. On one hand, a large percentage of its customers are low-income consumers, meaning that they'll potentially spend more there once they're making more. But on the other hand, Wal-Mart pays a large percentage of its employees minimum wage, which means that an increase in the minimum wage will boost the company's expenses.
So should investors dive into Wal-Mart now? On today's Stock of the Day, Motley Fool analyst Jamal Carnette says it's better to wait and see. He wants to give Wal-Mart a chance to live up to its own expectations while waiting for the company to begin delivering a dividend yield north of 3%. Until then, he'll be watching from the sidelines.
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The article Should You Invest in Walmart Today? originally appeared on Fool.com.Mark Reeth has no position in any stocks mentioned, and neither does The Motley Fool. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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