Walmart (WMT) Intrinsic Value: DCF (Dividends Based) : $43.38 (As of Apr. 27, 2024)

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What is Walmart Intrinsic Value: DCF (Dividends Based)?

As of today (2024-04-27), Walmart's intrinsic value calculated from the Discounted Dividend model is $43.38.

Note: Discounted Dividend model is only suitable for companies who have a consistant distribution history. If the company's dividends does not remain steady over a long period, results may not be accurate due to the low consistency. The model is also only suitable for predictable companies (Business Predictability Rank higher than 1-Star) with dividend payments. If the company's Predictability Rank is 1-Star or Not Rated, or if the company does not pay dividend, the data will not be stored into our database.

Walmart's Predictability Rank is 1-Star. Thus, this page is only used for demonstration purposes and the DCF related results in the screener and portfolio will appear as zero.

Margin of Safety % (DCF Dividends Based) using Discounted Dividend Model for Walmart is -38.68%.

The historical rank and industry rank for Walmart's Intrinsic Value: DCF (Dividends Based) or its related term are showing as below:

During the past 13 years, the highest Price-to-Intrinsic-Value-DCF (Dividends Based) Ratio of Walmart was 1.54. The lowest was 0.60. And the median was 0.71.

WMT's Price-to-DCF (Dividends Based) is not ranked ^*
in the Retail - Defensive industry.
Industry Median: 1.02
* Ranked among companies with meaningful Price-to-DCF (Dividends Based) only.

Walmart Intrinsic Value: DCF (Dividends Based) Historical Data

The historical data trend for Walmart's Intrinsic Value: DCF (Dividends Based) can be seen below:

* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD.
* For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.

* Premium members only.

Walmart Intrinsic Value: DCF (Dividends Based) Chart

Walmart Annual Data

Trend

Jan15

Jan16

Jan17

Jan18

Jan19

Jan20

Jan21

Jan22

Jan23

Jan24

Intrinsic Value: DCF (Dividends Based)

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30.38

Walmart Quarterly Data
	Apr19	Jul19	Oct19	Jan20	Apr20	Jul20	Oct20	Jan21	Apr21	Jul21	Oct21	Jan22	Apr22	Jul22	Oct22	Jan23	Apr23	Jul23	Oct23	Jan24
Intrinsic Value: DCF (Dividends Based)	Get a 7-Day Free Trial															-	-	-	-	-

Competitive Comparison of Walmart's Intrinsic Value: DCF (Dividends Based)

For the Discount Stores subindustry, Walmart's Price-to-DCF (Dividends Based), along with its competitors' market caps and Price-to-DCF (Dividends Based) data, can be viewed below:

* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.

Walmart's Price-to-DCF (Dividends Based) Distribution in the Retail - Defensive Industry

For the Retail - Defensive industry and Consumer Defensive sector, Walmart's Price-to-DCF (Dividends Based) distribution charts can be found below:

* The bar in red indicates where Walmart's Price-to-DCF (Dividends Based) falls into.

Walmart Intrinsic Value: DCF (Dividends Based) Calculation

This is the intrinsic value calculated from the Discounted Dividend Model with default parameters. The calculation method is the same as Discounted Cash Flow model except adjusted dividend are used in the calculation instead of free cash flow. This is the default method of calculation with GuruFocus DCF calculator.

Usually a two-stage model is used in calculating the intrinsic value with discounted cash flow model. The first stage is called growth stage; the second is called the terminal stage. In the growth stage the company grows at a faster rate. Because it cannot grow at that rate forever, a lower rate is used for the terminal stage.

GuruFocus DDM calculator is a two-stage model. The default values are defined as:

1. Discount Rate: d = 11%
A reasonable discount rate assumption should be at least the long term average return of the stock market, which can be estimated from risk free rate plus risk premium of stock market. GuruFocus uses 10-Year Treasury Constant Maturity Rate as the risk-free rate and rounded up to the nearest integer. It is updated daily. The current risk-free rate is 4.66%. Please go to Economic Indicators page for more information. Please note that we use the 10-Year Treasury Constant Maturity Rate of the country/region where the company is headquartered. If the data for that country/region is not available, then we will use the 10-Year Treasury Constant Maturity Rate of the United States as default. Then we added a risk premium of 6% to get the estimated discount rate. Some investors use their expected rate of return, which is also reasonable. A typical discount rate can be anywhere between 6% - 20%.

2. Dividend Growth Rate in the growth stage: g1 = 5%
The Growth Rate in the growth stage is initially set as the default 10-Year Dividend Growth Rate. In cases where the 10-year growth rate is unavailable, it defaults to using the 5-Year Dividend Growth Rate. If both the 10-year and 5-year growth rates are unavailable, the system defaults to the 3-Year Dividend Growth Rate.
However, it's important to note that there is a growth rate range. If the calculated growth rate exceeds 20%, it will be capped at 20%. Conversely, if the calculated growth rate falls below 5%, it will be adjusted to 5% to maintain a reasonable range.
=> Walmart's average Dividend Growth Rate in the past 10 years was 1.90%, which is less than 5%. GuruFocus defaults => Growth Rate: 5%

3. Years of Growth Stage: y1 = 10

4. Terminal Growth Rate: g2 = 4%

5. Dividends per Share: adjusted dividends per share = $3.7593.
GuruFocus uses adjusted dividends per share by default to ensure that the valuation reflects the total value of the company, as the actual dividend is only a portion of the total value.

All of the default settings can be changed in the DCF calculator and the results are calculated automatically.

Walmart's Intrinsic Value: DCF (Dividends Based) for today is calculated as:

Intrinsic Value: DCF (Dividends Based)	=	Dividends per Share	*	{[(1+g1)/(1+d)	+	(1+g1)^2/(1+d)^2	+	...	+	(1+g1)^10/(1+d)^10]
	+	(1+g1)^10/(1+d)^10	*	[(1+g2)/(1+d)	+	(1+g2)^2/(1+d)^2	+	...	+	(1+g2)^10/(1+d)^10]}

set x = (1+g1)/(1+d) = (1+0.05)/(1+0.11) = 0.94594594594595
and y = (1+g2)/(1+d) = (1+0.04)/(1+0.11) = 0.93693693693694

Intrinsic Value: DCF (Dividends Based)

Dividends per Share

{[x

x^2

...

x^10]

x^10

y^2

...

y^10]}

Dividends per Share

(1-x^10)

(1-x)

x^10

(1-y^10)

(1-y)]

3.7593

11.5406

43.38

Margin of Safety % (DCF Dividends Based)	=	(Intrinsic Value: DCF (Dividends Based)	-	Current Price)	/	Intrinsic Value: DCF (Dividends Based)
	=	(43.38	-	60.16)	/	43.38
	=	-38.68 %

Walmart (NYSE:WMT) Intrinsic Value: DCF (Dividends Based) Explanation

Unlike valuation methods such as Net Current Asset Value, Tangible Book per Share, Graham Number, Median PS Value etc, discounted Dividends model evaluates the companies based on their power of future dividend distribution instead of their assets.

Be Aware

What you need to know about Discounted Dividends model:

1. The Discounted Dividends model evaluates a company based on its future dividends distribution power
2. Dividend growth is taken into account; therefore a company with a higher dividend growth rate is worth more if everything else is the same.
3. Since we are projecting future growth, it is assumed that the company will grow at the same rate as it did during the past 10 years. Therefore this model works better for the companies with consistently steady dividends distributed.
4. The Discounted Dividends model works poorly for inconsistent dividends distributor like high growth companies.
5. Your expected return from the investment is a reasonable discount rate assumption.
6. A larger margin of safety should be required for companies with less dividends distributed.

You can screen for stocks that trade below their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) and Intrinsic Value: DCF (Dividends Based) with the GuruFocus All-in-One Screener. Companies with a high Predictability Rank that trade at a discount to their Intrinsic Value: DCF (FCF Based) and Intrinsic Value: DCF (Earnings Based) can be found in the screen of Undervalued Predictable Companies.

Walmart Intrinsic Value: DCF (Dividends Based) Related Terms

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Walmart (WMT) Business Description

Industry

GURUFOCUS.COM » STOCK LIST » Consumer Defensive » Retail - Defensive » Walmart Inc (NYSE:WMT) » Definitions » Intrinsic Value: DCF (Dividends Based)

Comparable Companies

Traded in Other Exchanges

WMT:Peru WMT:Mexico 1WMT:Italy WMTd:UK 0R1W:UK WMTD:Germany WMT:Germany WMT:Germany WMT:Germany WMT:Germany WMT:Chile WMT:Canada WALM34:Brazil WMT:Austria WMT:Argentina

Address

702 S.W. 8th Street, Bentonville, AR, USA, 72716

Website

https://stock.walmart.com

Walmart serves as the preeminent retailer in the United States, with its strategy predicated on superior operating efficiency and offering the lowest priced goods to consumers to drive robust store traffic and product turnover. Walmart augmented its low-price business strategy by offering a convenient one-stop shopping destination with the opening of its first supercenter in 1988.Today, Walmart operates over 4,700 stores in the United States (5,300 including Sam's Club) and over 10,000 stores globally. Walmart generated over $420 billion in domestic namesake sales last year, with Sam's Club contributing another $84 billion to the firm's top line. Internationally, Walmart generated $100 billion in sales. The company serves around 240 million customers globally each week.

Executives

John D Rainey	officer: Executive Vice President	C/O PAYPAL HOLDINGS, INC., 2211 NORTH FIRST STREET, SAN JOSE CA 95131
Jim C Walton	director, other: Director	C/O WALTON ENTERPRISES, INC., P.O. BOX 1860, BENTONVILLE AR 72712
S Robson Walton	director, 10 percent owner, officer: Chairman of the Board	C/O WALTON ENTERPRISES, INC., P.O. BOX 1860, BENTONVILLE AR 72716-0105
Alice L Walton	10 percent owner	110 N.W. SECOND STREET, SUITE 300, BENTONVILLE AR 72712
C Douglas Mcmillon	officer: Executive Vice President	702 SW 8TH STREET, BENTONVILLE AR 72716
John R. Furner	officer: Executive Vice President	702 SW 8TH STREET, BENTONVILLE AR 72716
Rachel L Brand	officer: Executive Vice President	702 S.W. 8TH STREET, BENTONVILLE AR 72716
Christopher James Nicholas	officer: Executive Vice President	702 SW 8TH STREET, BENTONVILLE AR 72716
David Chojnowski	officer: Senior Vice President	5505 BLUE LAGOON DRIVE, MIAMI FL 33126
Daniel J Bartlett	officer: Executive Vice President	702 SW 8TH STREET, BENTONVILLE AR 72716
Randall L Stephenson	director	208 S. AKARD ST., DALLAS TX 75202
Judith J Mckenna	officer: Executive Vice President	702 S.W. 8TH STREET, BENTONVILLE AR 72716
M. Brett Biggs	officer: Executive Vice President	702 SW 8TH STREET, BENTONVILLE AR 72716
Marc E. Lore	officer: Executive Vice President	443 GREENWICH STREET, PHA, NEW YORK NY 10013
Kathryn J. Mclay	officer: Executive Vice President	702 S.W. 8TH STREET, BENTONVILLE AR 72716