One retail stock that has been doing well this year is Walmart (NYSE:WMT). The big-box retailer has been proving to be resilient amid economic headwinds, including inflation. When it released earnings on Aug. 17, it reported revenue growth of 5.7%. And its operating income grew at an even faster rate of 6.7%. Not only that, but the company also raised its outlook for the year.
The company's stores are a popular option for cash-strapped customers as they can be a convenient one-stop shop to pick up groceries, prescriptions, and other day-to-day essentials. Plus, it's a low-cost leader, so prices are very competitive and often hard to beat.
Year to date, shares of Walmart are up 14%. That's slightly less than the S&P 500, which is up 18% over the same stretch. But it's far better than the SPDR S&P Retail ETF which is up by less than 7%.
In the world of retail, Walmart has been a top-performing stock to own this year. But it's also trading at its all-time high. While the business is stable and robust, the stock is trading at 31 times its trailing earnings. For a company that's growing at around 6% per year, that may be a bit of a rich premium for the stock.
Walmart can be a safe place to invest your money into right now but given its high valuation, investors shouldn't expect huge gains from here on out. This should be a stable investment and it can be a good income-generating one as well (it yields 1.4%) but beyond that, investors shouldn't expect too much from Walmart's stock as it may not be able to climb much higher.
