You might be surprised by the answer — which can inform a decision to buy or not buy the stock.
It can be interesting to play what-if games with the stock market. We all probably know that the answer to “What if I’d bought $10,000 of stock in Apple 10 years ago?” will be a huge sum. Indeed, you’d have more than about $95,000 — and more than around $100,000 had you reinvested dividends.
With many other companies, though, the answer isn’t such a guarantee. So here’s a look at where you’d be today if you’d socked $10,000 into shares of Walmart (WMT 1.04%) a decade ago.
The answer is less exciting: You’d have around $29,500 — or around $32,800 if you’d reinvested dividends (as of June 17). That probably still seems like a respectable gain, but it actually lags the overall stock market as measured by the S&P 500. The S&P 500 would have turned your $10,000 into $30,700 or $33,400, depending on whether you’d reinvested dividends. In fact, shares of Walmart lagged the S&P 500 over the past five years and 15 years, too.
What gives? Well, for one thing, many companies, once they grow huge, can find their growth rate slowing. Walmart is certainly huge, with a recent market value of $542 billion. And it’s the biggest employer in the U.S., too, recently with 2.1 million people on its payroll globally and nearly 1.6 million domestically. (The U.S. military recently had fewer than 1.5 million active-duty members.)
So, should you invest in Walmart? It depends on your views on its valuation and future prospects — and your overall investing preferences. If you favor growth stocks, look elsewhere. (Walmart is growing, though. In its first quarter of fiscal 2025, revenue increased by 6% year over year, while operating income rose nearly 10%.)
Walmart doesn’t appear to be a bargain right now, though, with a recent forward-looking price-to-earnings (P/E) ratio of 28, above its five-year average of 23. You’ll likely find more attractive opportunities elsewhere. You might even just invest in an S&P 500 index fund and do very well.
