$1,000, 5 Years Later: Walmart Stock A Beacon For Investors

Investors who have owned stocks since 2016 generally have experienced some big gains. In fact, the SPDR S&P 500 SPY total return in the past five years is 131.9%. But there is no question some big-name stocks performed better than others along the way.

Walmart’s Big Run: One company that has been a solid investment in the past five years is discount retail giant Walmart Inc WMT. Not only has Walmart successfully fended off online competition from Amazon.com, Inc. AMZN, it has joined Amazon as one of the leading e-commerce companies in the market.

Walmart started the 2010s as almost an exclusively brick-and-mortar business. However, by 2015, the company had upped its annual e-commerce investment from $1 billion to between $1.2 billion and $1.5 billion.

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Walmart acquired e-commerce site Jet.com for $3.3 billion in 2016. The company has also been investing in same-day delivery and in-store pickup. Walmart appears to be poised to continue its investment and innovation in the 2020s, announcing an $11 billion commitment to store redesigns, including the addition of autonomous floor cleaners, shelf scanners and unloaders.

In August 2020, Walmart reported second-quarter e-commerce sales exceeding $10 billion for the first time. Those sales numbers continued to grow by 79% year-over-year in the third quarter as well.

At the beginning of 2016, Walmart shares were trading at around $61. That level ultimately marked the low point of the past five years, as Walmart stock traded steadily higher through early 2021 with few interruptions. Walmart made it as high as $109.98 in early 2018 before the stock consolidated for about a year and a half.

The stock broke out to the upside again in late 2019, this time making it all the way to a new all-time high of $125.38 in late 2019 prior to the pandemic.

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Walmart In 2021, Beyond: Fortunately for Walmart investors, grocery demand is immune to the pandemic. Walmart shares only dropped down to $102 during the March market sell-off and had rebounded to new all-time highs again by April. The stock has continued its momentum into 2021, soaring as high as $153.66 before pulling back to around $145.

Walmart investors who bought five years ago and held on have generated some impressive returns during one of the hottest market periods in recent history. In fact, $1,000 in Walmart stock bought in 2016 would be worth about $2,471 today, assuming reinvested dividends.

Looking ahead, analysts are expecting Walmart to gain even more ground in the next 12 months. The average price target among the 33 analysts covering the stock is $165, suggesting 13.1% upside from current levels.

(Photo: Walmart)