Company Overview
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Introduction:
Identifying the difference between big retailers such as Wal-Mart and Target is just more than sales and merchandising. Wal-Marts Mission Statement is quality goods at low price, responsible manufacturing, and opportunities for growth. On the other hand, Targets mission is to develop, grow, and expand a company of well-trained, highly-motivated, and customer-service-oriented. Target measure the companys achievement based on the role in the communities they serve. Target is committed to social, economic and environmental well-being in every community. The question is why consumers choose one retailer over the other and who these consumers are, and to find out which one is the greater investment going forward. This paper will clarify the stock trading, the type of securities, and the growth of two companies between Wal-Mart and Target.
Companys Stock Trading and Stock Characteristic for Wal-Mart and Target
Wal-Mart rates higher than Target when it comes to returning customers, variety in products, price and store availability, however, Target receives higher rates for store organization, cleanliness, style, store navigation and location, product quality, customer service, and advertising. Although Wal-Mart is a $200 billion market capitalization company, and Targets market cap is $50 billion, Target could easily increase its share from its current level by raising customer satisfaction of price, availability, and ease of finding store locations to the level of Wal-Mart stores.
The trade on electronics which Target and Wal-Mart stock are exchanged is based on minimum standards for net tangible assets, earnings, market value of publicly held shares, and number of common shares owned by the public, and monthly trading volume. So far this year, Targets stock is up 23 percent versus a 6.4 percent gain in Wal-Mart shares. Analysts estimate that Target stock trades at 12.8 times versus 9.3 times for Wal-Mart, and Targets profits are expected to grow 14.7 percent, higher than the 12.3 percent annual growth for Wal-Mart over the same period. Numerous components could have played a part on increasing Targets share versus Wal-Mart, such that Target is offering stylish, higher quality yet affordable designer clothing and home products which attracts higher middle class families with more money in their pocket at a time when gas prices and low sales in housing is changing the spending ability of consumers.
Target has more room to grow over the next five years and plans to open 500 more stores across the nation, and therefore Targets stock has a better opportunity to grow more than Wal-Marts stock over the next few years.
Type of Securities for Wal-Mart and Target
Target had authorized 6,000,000,000 shares of common stock that could be issued or outstanding. Target only had 874,074,850 shares of common stock that were issued and outstanding on January 28, 2006. On February 3, 2007 Target had 859,771,157 shares of common stock that were issued and outstanding. Target had authorized 5,000,000 shares of preferred stock that could be issued or outstanding. Target did not have any shares of preferred stock issued on January 28, 2006 or in February 3, 2007.
Wal-Mart had authorized 11,000,000,000 shares of common stock that could be issued or outstanding. Wal-Mart had 4,165,000,000 shares of common stock were issued or outstanding on January 31, 2006. Wal-Mart had 4,131,000,000 shares of common stock issued or outstanding as of January 31, 2006. Wall-mart authorized 100,000,000 shares of preferred stock that could be issued or outstanding. Wal-Mart had none issued or outstanding in 2006 or 2007.
Characteristics of Securities for Wal-Mart and Target
Both Target and Wal-Mart were authorized to issue more shares of both common and preferred stock. Target and Wal-Mart did not issue any more common or preferred stock. Target and Wal-Mart both bought back some of the outstanding common stock in 2007.
Analysis Summary of Four Basic Financial Statements for Wal-Mart and Target
The four basic financial statements of every business are the Balance Sheet, the Income Statement, the Statement of Retained Earnings, and the Cash Flow Statement. The balance sheet will give a good idea as to how a business is doing at a specific time. The attached balance sheets for a three year period show how both Target and Wal-Mart are doing financially. Between the two companies