Walmart Inc (NYSE:WMT) share price plunged almost 22% in the last six months after hitting the all-time high of $108 a share at the beginning of the year. The drop in its share price is mainly due to lower-than-expected guidance for the full year. The broader market sell-off has also impacted its share price performance in the last couple of months. So, is it a good time to be buying Walmart shares?

Traders are wondering whether the dip in Walmart share price is offering an entry point for the long-term investors.

Is Buying Walmart Shares a Good Idea?

Walmart was among one of the favorite stocks for defensive investors due to its long dividend history and stable business model. The company has increased its dividends in the last 45 consecutive years. It returned almost $14.5 billion to investors last year through share buybacks and dividends.

The company, however, has been experiencing difficulties in expanding their sales and earnings over the last five years – which is now beginning to impact its dividend growth potential and share price performance. Walmart blames increasing competition and the emergence of private labels for sluggish growth. Its dividend growth rate declined to 2% in the last three years – which isn’t an attractive pace for defensive investors.

Walmart sales grew only 4.5% year over year in the latest quarter while comparable sales rose just 2% since the same period last year. Its earnings per share has been declining over the past couple of years; Walmart’s earnings per share stood around $3.28 in fiscal 2018, a sharp drop from earnings of $4.38 per share in fiscal 2017 and $4.57 in 2016. This is partially due to the market competition continuously putting pressure on its margins.

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The company expects to generate earnings per share in the range of $4.75 this year – which is a lot lower than analysts’ consensus estimate of $5.13 per share. Overall, slower sales growth and declining margins could continue to affect Walmart’s share price in the days to come.

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