Being American Is Not Simply a Way--It's A Place
Diane is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
Over the last decade we have repeatedly heard and come to exactly understand what is meant by the saying “freedom doesn’t come free.”
Thousands of Americans have lost their lives fighting to protect our country. Thousands more have risked their lives and sacrificed a great deal for our nation.
As the bitter and deadly wars in Iraq and Afghanistan come to an end, veterans are facing a new fight. Scores are fighting for a job.
According to data from the Bureau of Labor, the unemployment rate for post 9-11 veterans is an elevated 9.7%. The unemployment rate for post 9-11 female vets is even higher at a whopping 19.9%.
Wal-Mart (NYSE: WMT) is stepping in and steeping up to help military vets looking for a job.
The biggest private employer in the world and the largest global retailer recently announced it will hire any returning U.S. military veteran who wants a job. The Bentonville, Arkansas based company will offer employment to as many as 100,000 veterans over the next five years.
Veterans return home with a bevy of traits that make them attractive employees including discipline, adaptability, endurance, quick reaction time, and the capability of swiftly learning new skills. But Wal-Mart's hiring move is not based on impressive resumes or character; it is more about the spirit of America, respect and reward.
And in an era where many people are bent are buying American made products or from a true American retailer, buying from an American hero is even more gratifying.
While that may be reason enough for some to invest in Wal-Mart, there are plenty more good reasons.
With some 8,500 in 15 countries under 55 different names, Wal-Mart has a commanding position all around the world.
Wal-Mart continues to expand both stateside and abroad. Superstores are popping up in and around some big cities like Chicago, Detroit and Los Angeles. Overseas growth areas include Mexico and China. Management responds immediately to growing trends, changing tastes and new offerings. Stores have become true one stop shopping centers, offering everything from clothes to electronics to health and beauty products to groceries.
Wal-Mart's stock does not carry the same cachet like competitor Amazon.com (NASDAQ: AMZN), but that is part of its attraction to many investors. Sometimes, boring isn't bad. Amazon, once a strictly online store, is branching out with a bevy of bricks-and -mortar warehouses in attempts to get customers their orders as quickly as possible. The expansion is currently weighing on the company’s bottom line.
Speaking of warehouses, Sam’s Club adds a nice chunk to Wal-Mart's revenue (around 12%). This successful chain of warehouse clubs or “membership stores” where most customers buy in bulk, has garnered a loyal following among small businesses. All Sam’s Club stores are open early hours exclusively for their niche business members. Some locations also sell gasoline. There are roughly 600 Sam’s Clubs peppered across the U.S. and 100 internationally.
Rival Costco (NASDAQ: COST) operates 622 warehouses throughout the U.S., Puerto Rico, Canada, Mexico, the UK, Japan, Taiwan, Korea and Australia. The company is currently tempering domestic expansion plans concerned about over expansion and cannibalization of existing store locations. While widely prosperous, this chain does not enjoy the same small business constancy as Sam’s.
Wal-Mart shares have taken a breather and retreated some 9% from its all-time high of $77.60 in mid-October. The slide is attributed to uninspiring Q3 sales. Also plaguing shares of the giant retailer are bribery allegations in Mexico, Brazil, India and China, leaving many to question if the veteran hiring program is simply for publicity. Regardless of the motive, it's commendable.
Wal-Mart sports a decent 2.25% dividend yield. With a beta of .33, shares are much less volatile than others in the industry and the general market. The company makes money, and lots of it, from both its anchor stores and Internet sites. Global locations kick-in another 25%. Sporting a P/E of less than 13 times analysts’' consensus of $5.40 for the remainder of this fiscal year, shares look downright cheap.
Wal-Mart’s patriotism alone is likely to draw many to the company both as a place to shop and to invest.
Applause is in order for Wal-Mart's veteran hiring stance, or in the very least--a salute.
DianeAlter has no position in any stocks mentioned. The Motley Fool recommends Amazon.com and Costco Wholesale. The Motley Fool owns shares of Amazon.com and Costco Wholesale. 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. Is this post wrong? Click here. Think you can do better? Join us and write your own!