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

Walmart (NASDAQ: WMT) is a Dividend King, having rewarded shareholders with over 50 annual dividend increases. A company can't build a record like that by accident; it requires a strong business model that is executed well in both good times and bad.

Without question, Walmart is an attractive business. Here are three reasons why you might want to buy the stock today, and one reason why you might prefer to keep it on your wish list.

1. Walmart is a huge and diversified retailer

Walmart is a retail giant. It generated $179.5 billion in revenue in the third quarter of 2025. Net income for the quarter was $6.1 billion. Both figures tower above most other retailers.

From a market cap perspective, Walmart ranks as the world's largest consumer staples company. It is more than twice the size of the No. 2 name and fellow retailer, Costco. Being big alone isn't enough to make Walmart's stock worth buying, but it hints at a very successful business.

Image source: Getty Images.

That said, there's another wrinkle here that is highlighted by the Costco comparison. Like Costco, Walmart operates a club store (Sam's Club). However, in addition to that relatively small division, it also operates big-box stores that compete with Target. Additionally, it operates grocery stores that compete with the likes of Kroger. E-commerce is also an increasing part of the story.

For a retailer, it has a lot of irons in the fire, and it competes well in each category.

The company also boasts material geographic diversification. The vast majority of its business is domestic, but it operates in another 18 countries beyond the United States. If you are looking for a retail stock, Walmart will let you cover a lot of ground.

2. Walmart is performing well right now

Given the company's size, it isn't realistic to expect Walmart to be a growth stock. It is more of a slow and steady giant.

However, at the moment, it is actually performing quite well as a business. In the third quarter of 2025, the company's adjusted revenues increased 6%, with adjusted operating income up 8%. Same-store sales in the key U.S. market rose 4.5%.

To provide a comparison point, Target's revenues decreased by 1.5%, and its operating income declined by 18.9%. Same-store sales were off by 2.7%. Very clearly, Walmart is doing much better than one of its most important competitors. While Costco is doing better as a business, Walmart's relatively small Sam's Club division is easily holding its own.

Taken as a whole, these factors show that Walmart is performing very well as a business.

3. Walmart's focus never goes out of style

A big selling point for Walmart today is its focus on everyday low prices. Consumers are increasingly tightening their belts amid concerns about rising costs. That's resulted in a trade-down effect, as more customers seek out bargains. Walmart is seeing increased traffic at its stores while more upscale-focused retailers, such as Target, as seeing less.

That said, bargain prices never go out of style. This makes Walmart a relatively enduring business. Sure, there may be shifts at the fringes of its customer base, but there will always be people who seek out its stores in an effort to stretch their dollars as far as they can. The core focus on value is at least partly why the company has managed to build such a large business and achieve Dividend King status.

One caveat

There are several reasons why you might want to consider buying Walmart and holding it for the long term today. In fact, if there's a recession on the way, it could end up performing even better as a business.

However, there's also one reason why you might be better off adding it to your wish list: valuation. The stock's price-to-earnings, price-to-sales, and price-to-book value ratios are all above their five-year averages. The same reasons you're considering Walmart are why other investors are buying it, too. At this point, the stock appears to be expensive.

Most investors will likely be better off waiting for a more attractive entry point into this industry-leading business, despite its strong core business focus and currently strong financial results.

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.