Should I Invest in Walmart and Microsoft?
By observing what is currently happening with Walmart and what has transpired with Microsoft, a conclusion is drawn that Microsoft is the better investment choice.
Published April 22, 2021.
First, let’s discuss Walmart. It shines through the pandemic and offers a reliable dividend. Recently, they’ve started a war with Amazon Prime Time with their Walmart +.
However, there are downfalls. It’s about their e-commerce, and the problem is Amazon. Walmart's US e-commerce sales have leaped by 69%. So far in 2021, the stock has given up more than 3%, and this slows down the S&P 500's gain by almost 10%.
In my personal opinion, Walmart stock is not a good buy right now. It is trading below key technical benchmarks and has been lagging well behind the S&P 500 in 2021. In addition, Walmart stock is unlikely to be a huge winner due to its fundamentals, which are not outstanding.
Now, it’s time for Microsoft. This software giant has earned plaudits for its successful pivot from desktop computing to cloud computing, and Microsoft stock has risen as a result.
A month ago, they approved a contract to supply the U.S Army with their HoloLens. The deal can be worth around 21 billion USD over 10 years, and looking at the past it shows their share price only increasing.
In my view, yes, Microsoft is a good stock to buy. The reason why Microsoft is an easy buy is that there is simply no reason not to. If you are a portfolio manager or an individual investor, and the market is asking you to pay just 26x cash flow for a huge company growing revenues at 14% per annum, all the while paying a dividend, what reason can you possibly find to not own the stock?
Overall, Microsoft is the better choice because of its financial growth history being sound and its future prospects being promising. Whereas Walmart has not got such a good history, they are at war with Amazon Prime and slowing down the S&P 500's gain.