3 Reasons to Buy Walmart Stock Like There's No Tomorrow

Key Points

• Walmart is one of the largest retailers in the world and is performing well right now.

• The company is positioned to benefit in good economic times and bad ones.

• Walmart isn't going to be a good fit for all investors.

• 10 stocks we like better than Walmart ›

Walmart (NYSE: WMT) is an iconic name in the retail sector and on Wall Street more broadly. There are some really good reasons why investors might want to add this stock to their portfolios. Here are three of those reasons, but also one factor that might make waiting a better option for some investors.

1. Walmart is an industry leader

Walmart is an over $750 billion market cap retailer with a business that spans grocery stores to club stores, including a sizable online presence in the mix, as well. It competes quite well with its peers, a list that spans Target to Kroger to Costco. All in, the company operates "more than 10,750 stores and numerous eCommerce websites in 19 countries."

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Image source: Getty Images.

While being large isn't really enough to make any company worth buying like there's no tomorrow, it does set an important foundation with regard to Walmart. It highlights the incredible long-term success that the company has achieved across various niches of the retail sector. Another way to look at that success, however, comes from Walmart's status as a Dividend King, with over 50 consecutive annual dividend increases behind it. You don't build a record like that by accident; it requires a strong business model that gets executed well in both good times and bad.

2. Walmart has an attractive industry focus

One of the important aspects of Walmart's business is where it sits within the broader retail universe. The company has an "everyday low prices' ethos, with the goal of providing quality products that people can afford. During good economic times it has reliable customers that are either looking for bargains because they want to or because they have to. These customers tend to be fairly loyal through the economic cycle.

During economic slowdowns, including those that dip into recession territory, Walmart attracts better-off customers. Essentially, better-off customers trade down to Walmart when they are looking to save money. So when times are tough, Walmart's business also tends to be fairly resilient. Sure, the retailer misses out on wealthy customers that can afford to shop in high-end stores like Tiffany all of the time, but there are far more lower- and middle-class customers than wealthy customers. And Walmart is selling basic necessities, not high-end baubles. Strength through the economic cycle is a key positive that should attract investors to the stock.

3. Walmart is doing very well right now

That backdrop brings the company's recent performance to the fore. In the first quarter of fiscal 2026, Walmart saw a top-line advance of 2.5% with adjusted earnings up 1.7%. In the U.S. Walmart division, the company's largest business, comparable sales rose 4.5%, with transactions increasing by 1.6% and the average ticket up 2.8%.

Basically, in an uncertain time customers are going to Walmart more often and spending more when they do. The company's club store business saw similarly strong results. The international business, meanwhile, was a slight drag because of rising costs. All in, however, Walmart is executing on its plan and performing fairly well. That is a good reason to buy the stock, but it also sets up the big problem that investors have to grapple with, too.

Walmart isn't going to be a great fit for everyone

Walmart's stock is up over 30% over the past year. The dividend yield is a miserly 1% or so, which is even lower than the 1.2% yield on the S&P 500 index (SNPINDEX: ^GSPC). The price-to-sales and price-to-earnings ratios are both above their five-year averages. If you are a dividend investor or have a value focus, Walmart is probably a name to keep on your wish list.

That said, if you have a growth bias or are looking for a safe haven because you believe there's a larger economic storm brewing, Walmart could be a good fit. Just go in knowing that you are paying a premium to own what is really a pretty great business. If that premium doesn't bother you, then buy Walmart stock like there's no tomorrow if you want.

Should you invest $1,000 in Walmart right now?

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Reuben Gregg Brewer has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale, Target, and Walmart. The Motley Fool recommends Kroger. The Motley Fool has a disclosure policy.