Skip to main content

Wal-Mart Stores Inc (WMT) Is Now Threatening Amazon.com, Inc. (AMZN)

By U.S. News & World Report

It has been a challenging year for many U.S. retail companies, but Wal-Mart Stores Inc (NYSE: WMT) has risen to the occasion. On Tuesday, Citi analyst upgraded Walmart to “buy” and said investors should expect more of the same from the stock in 2018.

Walmart’s stock has gained 43 percent year-to-date, more than double the return of the overall market. However, while investors have obsessed over identifying which retail companies are threatened by Amazon.com, Inc. ( AMZN), McShane says Walmart has stealthily become a threat to Amazon.

[See: 7 of the Best Blue-Chip Stocks to Buy for 2018.]

“Our belief [is] that its aggressive omni-channel strategy will continue to drive significant sales growth, and WMT’s e-commerce operations are emerging as a true challenger to Amazon, both factors that could fuel further multiple expansion,” McShane says.

McShane says Walmart is well-positioned to defend its grocery business given its low prices, physical store footprint and increasingly integrated online platform. She says consensus earnings and margins estimates are currently too low, particularly for the second half of 2018.

Looking ahead to Walmart’s fourth-quarter earnings expected in February, Citi estimates the company will report in-line earnings per share of $1.38. However, Citi says Walmart will surprise to the upside with same-store sales growth of 2.5 percent compared to consensus estimates of 1.9 percent growth. In the most recent quarter, Walmart reported 50 percent year-over-year growth in online sales.

Citi is also anticipating Walmart will increase its dividend payout from its current yield of 2 percent following U.S. tax reform.

[See: 7 of the Best Stocks to Buy for 2018.]

McShane’s optimism about Walmart’s 2018 extends to the rest of the U.S. retail sector as well. She says retailers are starting to recognize just how much of an asset a physical store can be and are attempting to leverage that asset by remodeling stores and focusing on differentiating themselves from Amazon.

“After years of concern about secular competition from Amazon and other online-only retailers, we think fears could start to subside in a meaningful way in 2018,” McShane says.

McShane says O’Reilly Automotive Inc ( ORLY) is Citi’s top stock pick in the hardline retail space, but Walmart is a close second.

In addition to the “buy” rating, Citi has a $117 price target for Walmart stock.

More from U.S. News

Buy and Hold: Be an Investing Expert Like Warren Buffett

8 Stocks to Buy For a Starter Portfolio

9 Food-Focused ETFs to Feed Your Portfolio

Wal-Mart Stores Inc (WMT) Is Now Threatening Amazon.com, Inc. (AMZN) originally appeared on usnews.com

Don’t Settle for Student Loans to Pay for Online Education

By WTOP Staff
Online college programs are becoming a more popular choice for prospective students, with one study finding that more than 6 million students enrolled in at least one online course in fall 2015. The popularity of these courses can be attributed in part to their flexibility with working adults' schedules, students' ability to progress more quickly through online programs and, oftentimes, cheaper tuition. [See 10 low-cost online bachelor's programs for out-of-state students.]Online degrees can be beneficial to many college students, but some studies have shown online learners complete their programs at lower rates than students at traditional brick-and-mortar campuses. Individuals with student loans but no degree comprise two-thirds of defaulted borrowers. Though these numbers are not encouraging, just like for traditional programs, there are ways to reduce how much you'll need to borrow for an online program to ensure you won't become one of these statistics. Don't just settle on borrowing student loans to cover the whole cost of your program and living expenses. Instead, start thinking about how to cut costs and cover your balance in different ways, such as the following. -- Grants and scholarships: Even though you are taking an online course, you can still apply and receive grants and scholarships. But your first step should be to complete the Free Application for Federal Student Aid, commonly referred to as the FAFSA, which will allow you to receive a Pell Grant if your expected family contribution is low enough. The EFC criteria and award amounts are adjusted annually, but the 2017-2018 academic year awards range from $606 to $5,920, which could significantly lower the amount you borrow annually. Your next step is to apply for scholarships. You can start by checking online scholarship search engines, such as the Salt Scholarship Search, College Board's BigFuture and Peterson's. But don't forget to take advantage of local organizations and your school's financial aid office. Both may offer scholarships that you can't find with a national scholarship search. [Review these 10 sites to kick off your scholarship search.]For instance, organizations like the Elks Club, Knights of Columbus or the Rotary Club typically offer scholarships annually to local students. Just because you're going to school online doesn't mean you're ineligible. Visit your local library for scholarship listings, and ask around town. You might be surprised how many local organizations offer scholarships. While these scholarships typically aren't large, every little bit counts. Each dollar you receive in a scholarship is a dollar you don't have to borrow and pay interest on. -- Work-study: Another option for online students may be work-study awards. Not all students enrolled in online programs are eligible, but students at some schools -- including, for example, SUNY Empire State College and Liberty University -- are. Work-study awards are not given upfront like scholarships and grants. In most cases, they are an offer to earn up to the awarded amount if you secure an eligible work-study job. While there is a misconception that all work-study jobs must be on campus, students can work for off-campus, nonprofit or public employers as long as the work is in the public's interest. You may be able to work for a for-profit employer if the job is relevant to your course of study. No matter who the outside employer is, it will need to have an established agreement with your college for you to receive work-study funds. Remember, to be eligible for federal financial aid, you must be enrolled and pursuing a degree or certificate. If you're not working toward a credential, Pell Grants and work-study won't be option, but you may still be able to take advantage of private scholarships -- just be sure to read the eligibility criteria carefully. [Explore what to know about financial aid in online programs.]-- Pay as you go: One of the great benefits to enrolling online is the flexible schedule, which can allow you to complete your college coursework around your responsibilities. But prospective students often overlook using their part- or full-time job earnings as an option for paying for college. Almost 80 percent of college students in 2015 worked at least part time while attending classes, according to the National Center for Education Statistics. By budgeting and thinking strategically about your college costs, you can likely reduce your dependence on student loans by paying a portion out of pocket. Many -- but not all -- online programs are less expensive than traditional programs and often have shorter payment periods. Six, eight or 10 weeks are common course durations. Because of the frequency of payments in an online setting, you may be well-placed to pay as you go and possibly avoid borrowing altogether. Attending college online and avoiding student loans may be challenging, but if you are willing to put in the effort, you can limit the amount you need to borrow. More from U.S. News Q&A: Understanding Student Loan Discharge Eligibility Student Loan Refinancing Isn't Right for All Borrowers
Read Next Story

Related News

Where to take the family while they visit DC

How the Tax Cut Affects Investors

Chelsea Manning filed to run for US Senate