Is Walmart a Publicly Traded Company? An In-Depth Look
Walmart is an iconic American company and one of the world‘s largest retailers, with over 10,500 stores globally and fiscal 2023 revenue of $611 billion. The company‘s vast scale, dominant market position, and long history of success make it a popular and well-known investment. But have you ever wondered: is Walmart a public company, and can anyone buy Walmart stock?
The short answer is yes, Walmart is a publicly traded company listed on the New York Stock Exchange under the ticker symbol WMT. Walmart first went public over 50 years ago in 1970, and its stock has generated strong returns for shareholders in the decades since then. However, the longer answer is a bit more nuanced. In this article, we‘ll take an in-depth look at Walmart‘s history as a public company, its shareholder base, how its stock has performed over time, and the key opportunities and risks facing the company going forward.
Why Did Walmart Become a Public Company?
First, let‘s define what a public company is. A public company is a business whose ownership is organized via shares of stock that are intended to be freely traded on a stock exchange or in over-the-counter markets. This is in contrast to privately held companies, which are owned by a smaller group of select investors.
Companies typically "go public" and list their shares on a stock exchange in order to raise capital from a broad pool of investors. This enables companies to fund growth initiatives, make acquisitions, or provide liquidity for existing owners. Going public also provides marketing and branding benefits by raising a company‘s public profile.
In Walmart‘s case, the company decided to go public in 1970 in order to fund its ambitious growth plans. Founded by Sam Walton in 1962, Walmart spent its initial years expanding rapidly by opening new stores throughout Arkansas and surrounding states. But this growth required increasing amounts of capital. According to Sam Walton, "(Borrowing money from banks) had gotten me into debt to every bank in Arkansas and southern Missouri."
To reduce its debt load and fund further expansion, Walmart filed for an initial public offering (IPO) in 1970. The company completed its IPO in October 1970, selling 300,000 shares to the public at a price of $16.50 per share, raising nearly $5 million in the process. Walmart used this influx of capital to accelerate its growth, and by the time the company listed on the New York Stock Exchange two years later in 1972, its stock price had already doubled.
Key Details of Walmart‘s IPO and Early Years as a Public Company
Here are some key facts about Walmart‘s initial public offering and early years as a public company:
- Walmart filed for its IPO in August 1970 and completed the offering in October 1970
- The IPO consisted of 300,000 shares priced at $16.50 each, raising $4.95 million
- Walmart‘s market cap at the time of the IPO was around $30 million
- By comparison, Walmart‘s market cap today is over $400 billion
- Walmart listed on the New York Stock Exchange in August 1972 under the ticker WMT
- In 1971, just a year after the IPO, Walmart created an employee stock ownership plan allowing associates to buy into the company‘s success
Walmart‘s decision to go public ended up being hugely positive for both the company and its shareholders. The capital raised in the IPO and Walmart‘s subsequently rising stock price enabled the company to expand from 38 stores in 1970 to over 10,500 today. Early investors in Walmart have been richly rewarded – a $1,000 investment in the 1970 IPO would be worth over $34 million today, representing an incredible 34,000% return.
How Has Walmart‘s Stock Performed Over Time?
Since Walmart‘s IPO in 1970, the company‘s stock has been on a remarkable upward trajectory. While there have of course been some ups and downs over the years, Walmart has consistently outperformed the broader stock market over the long run. Here‘s a look at Walmart‘s historical stock performance over a few key time periods:
- Last 12 months: +6.4%
- Last 5 years: +73% (+11.7% annualized)
- Last 10 years: +187% (+11.1% annualized)
- Last 20 years: +542% (+9.5% annualized)
- Since IPO in 1970: +3,400,000% (+21.6% annualized)
As you can see, Walmart has delivered incredible returns for buy-and-hold investors, compounding at over 20% annually since its IPO. More recently, Walmart‘s stock has continued to beat the market, outpacing the S&P 500 index handily over the past 1, 5, and 10 year periods.
In addition to impressive share price appreciation, Walmart also pays a reliable and growing dividend. The company has increased its dividend payout every year since first declaring one in 1974, placing it in rare company as a "dividend aristocrat". Walmart‘s current annual dividend of $2.24 per share yields 1.6%, providing a nice income supplement for shareholders.
Who Are the Largest Owners of Walmart Stock?
While anyone can buy Walmart stock through a brokerage account, the company‘s ownership is still heavily concentrated in the hands of the Walton family and a few major institutional investors. The Walton family, heirs of founder Sam Walton, collectively own around 50% of Walmart‘s outstanding shares through the family holding company Walton Enterprises and the Walton Family Foundation.
Some of the other top owners of Walmart stock include:
- Vanguard Group: 4.9% of shares
- BlackRock: 2.3% of shares
- State Street Corporation: 2.1% of shares
- Geode Capital Management: 0.9% of shares
The high ownership stakes of the Walton family and large asset managers provide some stability to Walmart‘s shareholder base. However, these concentrated positions also mean the trading decisions of just a handful of major owners can move the stock price significantly.
How Can Individual Investors Buy Walmart Stock?
If you‘re interested in becoming a part-owner of Walmart by purchasing WMT stock, the process is fairly straightforward. You‘ll first need to open a brokerage account with a reputable broker if you don‘t already have one. Leading online brokers like Vanguard, Fidelity, Charles Schwab and Robinhood all offer the ability to buy and sell Walmart stock.
Once your brokerage account is set up and funded, you can buy Walmart stock by entering the company‘s ticker symbol (WMT) and specifying the number of shares or dollar amount you want to purchase. Most brokers charge a small commission for stock trades, typically in the range of $0 to $10 per trade.
The minimum investment required to buy Walmart shares is the cost of one share, which is currently around $140. However, some brokers do offer the ability to purchase fractional shares, allowing you to invest smaller dollar amounts. Overall, investing in Walmart stock is a fairly accessible option for most individual investors.
Is Walmart a Good Long-Term Investment?
Walmart‘s impressive historical returns naturally raise the question of whether the stock is still a good investment today. Of course, past performance is no guarantee of future results, so it‘s important to analyze Walmart‘s business fundamentals, competitive positioning, growth prospects and valuation.
There are reasons to be optimistic about Walmart‘s future. The company‘s unrivaled scale, with over 10,500 stores globally and $600 billion in annual revenue, provide significant competitive advantages. Walmart‘s everyday low prices and wide assortment make it a go-to shopping destination for millions of consumers. The company is also making smart investments in e-commerce, advertising and other higher-margin revenue streams to drive growth. And its fortress balance sheet and consistent free cash flow generation provide safety and stability.
However, there are also some notable risks and challenges facing Walmart. The company‘s sheer size makes it difficult to grow as quickly as smaller, more nimble competitors. Intensifying online competition from Amazon and others is putting pressure on Walmart‘s margins. And potential regulatory crackdowns, minimum wage hikes, or geopolitical disruptions could negatively impact profitability.
Walmart‘s current valuation is also a mixed bag. Its price-to-earnings ratio of around 25 is somewhat elevated compared to the stock‘s historical average. But it still looks quite reasonable compared to the broader market multiple of 30. And Walmart‘s reliable dividend, recession-resistant business model, and long growth runway help justify its premium valuation.
All things considered, Walmart still looks like a solid long-term investment for patient investors. The company‘s dominant competitive position and long-term growth prospects remain compelling. While the valuation isn‘t dirt cheap, it‘s still palatable in light of Walmart‘s quality and stability. As always, investors should carefully consider their own financial situation and risk tolerance before making any investment decisions.
Conclusion
In summary, Walmart is very much a publicly traded company and has been for over 50 years. Going public in 1970 was a major turning point for Walmart, providing the capital to fuel its extraordinary growth in the decades since. Today, Walmart is one of the most valuable companies in the world with a market capitalization over $400 billion.
While the Walton family remains Walmart‘s largest shareholder, its stock is widely held and can be easily purchased by individual investors. Walmart has richly rewarded long-term shareholders with impressive returns over the last half century. And despite its massive size, Walmart still has attractive growth prospects ahead as it expands globally and builds out its e-commerce capabilities.
Of course, Walmart faces stiff competition and isn‘t without risks, so investors should study the company carefully and consider their own financial circumstances before buying the stock. But for those looking to gain exposure to one of the world‘s largest and most successful retailers, Walmart is certainly a compelling publicly traded option to consider.
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