Comparing Wal-mart de Mexico S A B de C V (WMMVY) & Target (TGT)

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Wal-mart de Mexico S A B de C V (OTCMKTS: WMMVY) and Target (NYSE:TGT) are both large-cap retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Analyst Recommendations

This is a summary of recent ratings for Wal-mart de Mexico S A B de C V and Target, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wal-mart de Mexico S A B de C V 0 2 0 0 2.00
Target 1 11 8 0 2.35

Target has a consensus target price of $74.47, suggesting a potential downside of 2.07%. Given Target’s stronger consensus rating and higher possible upside, analysts clearly believe Target is more favorable than Wal-mart de Mexico S A B de C V.

Institutional & Insider Ownership

0.1% of Wal-mart de Mexico S A B de C V shares are held by institutional investors. Comparatively, 85.4% of Target shares are held by institutional investors. 0.2% of Target shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

Wal-mart de Mexico S A B de C V has a beta of 0.63, indicating that its stock price is 37% less volatile than the S&P 500. Comparatively, Target has a beta of 0.72, indicating that its stock price is 28% less volatile than the S&P 500.

Valuation and Earnings

This table compares Wal-mart de Mexico S A B de C V and Target’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wal-mart de Mexico S A B de C V $30.18 billion 1.51 $2.11 billion $0.98 26.64
Target $71.88 billion 0.56 $2.93 billion $4.71 16.14

Target has higher revenue and earnings than Wal-mart de Mexico S A B de C V. Target is trading at a lower price-to-earnings ratio than Wal-mart de Mexico S A B de C V, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Wal-mart de Mexico S A B de C V and Target’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wal-mart de Mexico S A B de C V 7.01% 23.53% 12.27%
Target 4.09% 23.34% 6.75%

Dividends

Wal-mart de Mexico S A B de C V pays an annual dividend of $0.35 per share and has a dividend yield of 1.3%. Target pays an annual dividend of $2.48 per share and has a dividend yield of 3.3%. Wal-mart de Mexico S A B de C V pays out 35.7% of its earnings in the form of a dividend. Target pays out 52.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Target has raised its dividend for 50 consecutive years. Target is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Target beats Wal-mart de Mexico S A B de C V on 11 of the 17 factors compared between the two stocks.

Wal-mart de Mexico S A B de C V Company Profile

Wal-Mart de México, S.A.B. de C.V. owns and operates self-service stores in Mexico and Central America. The company operates discount stores, hypermarkets, supermarkets, membership self-service wholesale stores, and pharmacies. It operates 1,820 Bodega Aurrerá discount stores, 270 Walmart hypermarkets, 94 Superama supermarkets, 162 Sam's Club membership self-service wholesale stores, and 10 Medimart pharmacies. The company also operates 522 Despensa Familiar and Palí discount stores; 94 Paiz, La Despensa de Don Juan, La Unión, and Más x Menos supermarkets; 133 Bodegas, Maxi Bodega, and Maxi Palí stores; and 29 Walmart hypermarkets in Costa Rica, Guatemala, Honduras, Nicaragua, and El Salvador. In addition, it imports and sells goods; develops properties; and manages real estate companies. The company was founded in 1958 and is headquartered in Mexico City, Mexico. Wal-Mart de México, S.A.B. de C.V. is a subsidiary of Walmart Inc.

Target Company Profile

Target Corporation operates as a general merchandise retailer in the United States. The company offers beauty and household essentials, including beauty products, personal and baby care products, cleaning products, paper products, and pet supplies; food and beverage products, such as dry grocery, dairy, frozen food, beverage, candy, snacks, deli, bakery, meat, and produce products; and apparel for women, men, boys, girls, toddlers, infants, and newborns, as well as intimate apparel, jewelry, accessories, and shoes. It also provides home furnishings and décor comprising furniture, lighting, kitchenware, small appliances, home décor, bed and bath products, home improvement products, and automotive products, as well as seasonal merchandise comprising patio furniture and holiday décor; and music, movies, books, computer software, sporting goods, and toys, as well as electronics that include video game hardware and software. In addition, the company offers in-store amenities, which comprise Target Café, Target Optical, Starbucks, and other food service offerings. It sells its products through its stores; and digital channels, including Target.com. As of March 8, 2018, the company operated 1,826 stores. Target Corporation was founded in 1902 and is headquartered in Minneapolis, Minnesota.

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