Beating Buffett

Wal-Mart [NYSE:WMT] July 2, 2009 $47.79

52-week range: $46.25 (Feb. 2, 2009) - $63.85 (Sep. 19, 2008)

Dividend = $0.2725 quarterly = 2.28% current yield

While business is not exactly booming right now Wal-Mart still is expected to post another all-time record fiscal year when things wrap up next January 31^st. Zacks looks for EPS of $3.56 and $3.89 for FY 2009 and 2010 respectively, up from FY 2008’s $3.42.

The dividend was raised 15% in the June quarter to an annual rate of $1.09 giving WMT shareholders a decent and well covered 2.28% current yield. This is the highest yield in WMT’s history. Revenues of over $401 billion in FY 2008 made Wal-Mart the world’s largest retail operation.

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by: Paul Price May 06, 2009 | about: COH    

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Costco now sells for $47.50 or 19x the already recession-reduced $2.50 estimate for FY 2009 [ends August 31].

That compares with a 10-year median P/E of 24x and a most recent five year average multiple of 21.7x. If you believe we’re near the bottom of the economic cycle this looks like a good time to play COST for a rebound over the next couple of years.

Costco has proven to be a great operator during both good and bad times. If this FY’s earnings do come in lower than last year’s, it will be only the third down year-over-year comparison in the past seventeen. The others came in 1994 and 2001 during similarly depressed conditions.

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