With the changes in the market environment, some may be looking for bargains, while fear, uncertainty and doubt (FUD) run high. But what if you don’t have the risk tolerance for that? Instead of buying high-risk, high-potential names, which could dip further before they bounce back, something more stable may be what’s right for you. A good example of this is Walmart (NYSE:WMT) stock.

The discount retailing giant just last month released a strong earnings report (more below). There’s also a good chance it’s able to overcome the challenge of high inflation. History shows consumer staples stocks like this one show greater resiliency during a recessionary environment. That’s a big positive, in light of the growing risk of a recession.

That’s not to say Walmart is on track to appreciate in value at the speed it did during 2020. At the time, pandemic tailwinds gave this blue-chip stock a meaningful boost. Yet a worthwhile positive return between now and the end of 2022 is certainly reachable.

If you’re waiting for today’s storms to pass, before you get back into more speculative plays, adding this name to your portfolio in the meantime may be a worthwhile choice.

The Latest With WMT Stock

Major indices year-to-date are in the red. Walmart shares, however, are more or less at the same price they were trading for at the start of 2022. Investors have dived into it due to its safe harbor qualities.

Sentiment for WMT stock is also bullish, due to its reporting of strong quarterly results last month. Beating on both revenue and earnings, guidance also suggests it’ll deliver results this fiscal year (ending January 2023) in-line with analyst expectations.

More importantly, results for the December quarter signal that the company will do just fine weathering the current issue of high inflation. Expanding its gross margins, it has been able to pass additional costs, including costs driven by supply chain headwinds, onto consumers.

All of this points to Walmart not only continuing to hold steady. It also points to the stock rising in value over the next twelve months. Again, maybe not like the more than 20% rise in price it experienced during 2020. However, possibly better than the sideways price performance it delivered during 2021.

Walmart Stock and Potential Returns

Some of you may be satisfied by just the prospect of WMT stock holding up, in the event the stock market moves even lower throughout 2022. Yet there may be a path for it to move to a price moderately above the $144.50 per share it trades for today.

Why? Growth during this fiscal year could come in ahead of current expectations. Walmart’s recent revenue and earnings beat points to this. So too, does the fact that it’s aggressively hiring tens of thousands of new employees, in order to expand its sideline advertising, grocery delivery and third-party marketplace businesses.

I’m not saying that the company, expected to see its sales grow 3.2%, and its earnings grow around 4.6%, is going to deliver double-digit top and/or bottom line growth this year. Given its mammoth size and maturity, that’s a tall order. It could, however, slightly beat these estimates. The top end of sell-side estimates call for it to generate $607.15 billion in sales, and around $7 per share in earnings.

This would represent around 6% revenue growth, and more than 8% earnings growth. Assuming the high quality of this blue chip enables it to maintain its current earnings multiple, this may translate into a high single-digit return for WMT stock. Combine this with the dividend (forward yield of 1.54%), and the total return could be near 10%. In other words, not a bad vehicle to stay ahead of inflation.

The Verdict on WMT Stock

It goes without saying you aren’t going to “get rich” owning Walmart stock. For risk-conscious investors though, now may be the time to enter a position.

The big boost it saw in 2020 may not repeat itself. But it’s keeping up with rising prices, successfully passing them to consumers. Add in its move into higher-growth areas, it could end 2022 in the green. Even if the market overall closes out the year in the red.

In terms of a longer-time horizon, it’s a great opportunity for those seeking slow-and-steady returns. Mainly, through consistent earnings growth. Not resting on its laurels, its big moves beyond just brick-and-mortar retail could enable it to avoid the stagnation and decline that brought down the retail behemoths of past generations.

Alongside this, it has continued raising its dividend over time. It’s a true “dividend aristocrat,” that has increased its payout to shareholders 48 years in a row. Earning a “B” rating in my Portfolio Grader, WMT stock is a solid choice, during both boom times and more challenging times.

— Louis Navellier and the InvestorPlace Research Staff

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Source: Investor Place