1 Incredible Reason to Buy Walmart (WMT) Stock Before It Reports Earnings on Aug. 20 -- and 1 Reason Not To

If you're looking for a coagulated bluish spot banal for your portfolio, see Walmart (NASDAQ: WMT).

Why put successful Walmart? Let's commencement with its dividend, which precocious yielded 0.9%. That whitethorn not look huge, but it's not acold from the caller output of the S&P 500 index, and it's a payout that has been increasing -- by astir 6%, connected average, implicit the past 5 years.

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It's besides been a coagulated performer, increasing reasonably rapidly contempt its tremendous size. (Its marketplace capitalization was precocious $890 billion.) Over the past decade, its shares    averaged yearly gains of 17%, and implicit the past 15 years, 14%. In its past quarter, Walmart posted gross up 7.3% and operating income up 5%. The institution is scheduled to study its second-quarter results connected Aug. 20, truthful it's worthy considering whether you privation to bargain earlier past -- successful lawsuit boffo results thrust the shares up.

A robust crushed to see Walmart is that the institution has been adapting to the changing times. Its planetary e-commerce business, featuring deliveries and at-store pickups, saw gross surge 26% twelvemonth implicit twelvemonth successful the past quarter, with rank fees increasing 17%. (Costco has been raking successful billions annually from its rank fees, and Walmart is pursuing suit -- though it doesn't necessitate rank for its shoppers.)

Another positive for the institution is that it's resilient successful economical downturns and is little volatile than the wide market. So should a marketplace clang oregon correction occur, perchance with a recession, radical volition inactive beryllium buying astatine Walmart -- and they whitethorn bash truthful adjacent more.

It's not each confetti and rainbows, though. There's besides a crushed to not invest successful Walmart close now: Its shares look overvalued. As of aboriginal August, its price-to-sales ratio was 1.24, good supra its five-year mean of 0.83. And the stock's forward-looking price-to-earnings (P/E) ratio of 38 was good supra its five-year mean of 27. You mightiness bash good if you bargain and clasp for a agelong time, but you'll trim your hazard if you hold for a little valuation.

Should you bargain banal successful Walmart close now?

Before you bargain banal in Walmart, see this:

The Motley Fool Stock Advisor analyst squad conscionable identified what they judge are the 10 champion stocks for investors to bargain now… and Walmart wasn't 1 of them. The 10 stocks that made the chopped are built for semipermanent maturation and could nutrient monster returns successful the coming years.