As you’ll discover below, by a couple standards of measure, right now is one of the best times in at least 10 years to buy what we consider to be “the #1 stock to own right now.”
If you’re a long-term investor, and you’re looking for a recession-proof, “sleep at night” kind of investment with a strong history of paying increasing dividends through both thick and thin, then this stock should be at the core of your portfolio.
As the world’s largest retailer, its competition simply can’t hold a candle to its dominant pricing power.
History shows the best-performing stocks over the long haul are dividend stocks — and not only has this company never once skipped a dividend payment, but it’s also boosted its dividends every single year since it first started paying them back in 1974.
If this sounds like the kind of investment you could benefit from, then right now could be the perfect time to get started…
In short, the company is making more money than ever today, yet its shares are priced near historic lows.
In addition, if you buy now, you can lock in one of its highest yields in history.
Perhaps that’s why in recent months prominent money managers and hedge fund giants Jim Simons and James Barrow have been piling into this stock. Combined, our records show they have about $410 million invested in this company.
Bill Gates, the second richest man in the world, also bought another 500,000 shares of this stock in the fourth quarter of 2012. All told, he now owns 11.1 million shares for the Bill & Melinda Gates Foundation Trust. By our math, the Foundation should collect over $5.2 million in dividends from this holding within the next three months alone.
Warren Buffett owns this stock too, adding almost 4% to his portfolio in the first quarter of 2013. He’s expecting his 49.2 million shares to pay Berkshire Hathaway over $23.1 million on the next dividend payout date.
Even our elected officials can’t resist the urge to collect the safe and ever-growing income stream this company offers its shareholders: according to the latest data out of the Center for Responsive Politics, 29 members of Congress own this stock (12 Democrats, 17 Republicans).
You should consider following their lead… especially when you take into account this stock’s long-term income potential on shares purchased today.
If the company keeps growing its dividends at the same rate at which it has since 2000 — which equates to a 17.2% annual boost — then in 10 years from now you could be collecting a 11.3% annual yield on the shares you buy today.
Hold for another 10 years and you could collect a 55% annual yield… from dividends alone.
The table below shows you what this could look like. Can you see why it’s so important to get started early?
You may think this scenario is far-fetched, but when you consider the company’s ultra-safe 38% payout ratio and the rate at which it’s been growing its earnings and dividends these potential yield-on-cost figures are entirely possible.
But even if the company only grew its dividend at half the rate at which it has historically, you’d still be collecting an outsized income stream on your original shares.
In short, this is the ideal stock to buy and forget about.
In case you haven’t guessed it by now, the company we’re talking about is Wal-Mart (NYSE: WMT) — the “King of Retail.”
Dan Ferris — one of the analysts we follow here at Daily Trade Alert – is the one who brought this opportunity to our attention.
In short, back in December of 2011 he noticed how Wal-Mart’s share price hadn’t gone anywhere in years — yet the value of its business had absolutely soared.
While the stock price has risen since then, it certainly hasn’t kept up with the increase in earnings.
Consider this: since 2000, Wal-Mart has hiked its quarterly dividends by over 600% and grown its annual earnings per share by 270%.
Take a look…
At the same time, the company has spent $68.2 billion buying back its own stock.
With these factors in mind, you’d think the share price would be through the roof… but it’s not.
In fact, at around $81/share, shares are trading hands for “only” about 19% higher than they did back in early 2000.
But back then, Wal-Mart was incredibly overvalued — trading around 45 times earnings.
Remember though, earnings have since soared… and we’re now looking at nearly the opposite situation in the company’s valuation. Trading for around 15 times earnings, the stock is nearly as cheap as it’s been in over a decade.
In addition, anyone who buys right now can lock in a 2.33% yield — a near-historic high for Wal-Mart.
Take a look…
Action to Take: If you’re a long-term investor… and you’re interested in creating what could be the ultimate portfolio for a lifetime of safe, reliable and ever-increasing income… then consider making Wal-Mart (NYSE: WMT) one of your core holdings today.
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