Walmart reached the top of the Fortune 500 in 2001, becoming the largest corporation in the United States, and has stayed there every year since except 2006. But what makes investors really smile is that Walmart is still expanding, offering the opportunity for growth in share values. There are two ways to invest in Walmart stock. You can go through a traditional broker or enroll in Walmart’s direct stock purchase plan (DSPP). Here is how to invest in Walmart stock by using either approach.
Research the current status of Walmart before you make a decision to buy the stock. Regardless of its past record, you should understand the company’s situation and future prospects when you make an investment decision. Walmart stock is listed on the NYSE and trades under the stock symbol “WMT.” Use this symbol to locate current stock prices and analysis on financial websites. Get a copy of the company’s annual report and other financial documents (available on its website). Look for articles about Walmart in retail industry trade magazines and publications like the “Wall Street Journal.”
Decide if you should buy stock through a broker or use Walmart’s direct stock purchase plan. A Walmart DSPP has very low minimum investment requirements and purchase fees, so it’s ideal for long-term investment or the investor with limited funds. If you are following a short-term trading strategy, a broker is better.
Open an account with a discount broker to buy Walmart stock if you decide that’s the best strategy for you. You can do this through a bank or a full-service broker. However, if you are making your own stock buying decisions, you will save money on commissions by using a discount broker. You can open an account online, usually with a $1,000 minimum deposit.
Enroll in the Walmart direct stock purchase plan if this is the best investment method for you. Start by getting a copy of the plan prospectus (see Resources below). Walmart requires an initial investment of $250, but this can be made in $25 payments if set up as an automatic debit monthly from your checking or savings account (for existing shareholders, the minimum is just $50). There is a one-time setup fee of $20. All transactions carry a $1 fee if made via automatic debit, plus 5 cents per share (the fee is $5 if you contribute by check). Sales fees are higher: $15 per transaction plus 5 cents per share. You can find out more by calling Walmart’s transfer agent Computershare, toll free at 1-800-438-6278.
Decide if you want to take advantage of other features of the Walmart DSPP. You can choose to have all dividends reinvested with no transaction fees. Another service is share safekeeping (the company will keep your share certificates secure for you). Walmart also allows you to set up your account as a traditional IRA, Roth IRA or a Coverdell Educational Savings Account (formerly Education IRA), which can provide significant tax savings.