YCHART OF THE DAY: Growth Obsessed? Laggard Wal-Mart’s Nice Margins vs. Amazon’s Unprofitable Growth
A smart aside in today’s Wall Street Journal notes Wal-Mart’s (WMT) difficulty in generating sales growth in the U.S. (and includes a wonderfully New York-centric and gratuitous fact: there are enough Wal-Marts in the U.S. to completely cover Manhattan!). The piece in part blames/credits Amazon (AMZN) as it leads the boom in online retailing, which takes away from in-store sales. But being the leader is costly, as seen above. Wal-Mart is maintaining its nice margins, paying a dividend that yields 2.4% and buying in its shares like a champ. Amazon, writing checks to the post office and others to cover your free shipping charges, is suffering declining profits as it grows. Is revenue growth of about six times Wal-Mart's justification for Amazon’s PE, 132 on trailing earnings, that is ten times Wal-Mart's?
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