Creator1

This begins with an idea. I read about someone who had invested their subscription cost of Netflix into Netflix stock for over 20 years. Ultimately, this is really a tale about ‘time in the market’ vs ‘timing the market’, coupled with persistence. The person was cresting $850,000 worth of Netflix shares, with only about $6,000 invested over the same period.

This idea made sense to me somewhat, I’m willing to pay the cost of the subscription, wouldn’t I be willing to buy their stock/company as well? In reality this basis alone is a poor way to decide whether I want to invest in their company. I have a GoPro, but I don’t want to invest in it currently. But, if it is a company I would purchase, what would put the subscription/monthly payment aside to invest yield over the long term?

I’m not sure, but I’ll hopefully begin to find out. Without revealing too much about myself here are some ideas if you’d be interested in trying this;

My insurance provider

Cell phone provider

Subscription services you use (I will not be investing in Netflix, but I pay for other subscriptions)

Walmart is one of the stocks that causes me some issues. I want to match my discretionary spending at Walmart, but I am running into a problem. There are two Walmart stocks I have available to me, Walmart (WMT), and Wal Mart de Mexico (WMMVY). As I understand it, Wal Mart de Mexico is in fact Walmart, with several other brands that operate in Mexico and Central America. This is Walmart’s largest market outside of the United States.

The issues for me reside in cost, capital return, and risk management.

Let’s begin with price and return on capital return.

On it’s face, WMMVY is currently trading at $33.91 and pays out dividends around the end of the year around November then again in mid-December. This company often declares ordinary dividends and extraordinary dividends. By buying it from the OTC markets you get a quarterly dividend of $.14 a share. This is less than Walmart’s $.23 quarterly dividend per share, however the price difference is much greater. From a yield perspective, Walmart yields .96% dividends, while Wal Mart de Mexico has a yield of 1.7%. Additionally, Walmart’s P/E ratio is 42, compared to Wal-Mart de Mexico’s P/E ration of 21.5.

A strategy I have is to hold companies that will continue to grow and continue to grow dividends, Walmart satisfies both. But with this math if I were to have dividends reinvested, it would take me 61 shares of Wal mart de Mexico to buy 1 share a year with dividends. For me to achieve the same effect with Walmart, I’d need to buy 107 shares at its current price. My first goal when purchasing shares I intend to keep indefinitely, is to have the dividends buy a share a quarter, to achieve this goal with Wal Mart de Mexico, I need to purchase 243 shares ($8,019), compared to 425 Walmart shares ($41,586).

Some risk factors to consider:

Walmart’s primary market is the United States, which faces uncertainty such as high interest rate, decreased consumer sentiment, increased tariffs, worsening political situation as they are urged to ‘eat the tariffs’. Furthermore, there is a devaluation of the US dollar that is largely exaggerated, but is disturbing nonetheless.

Wal Mart de Mexico may hedge against US dollar devaluation, however, the data may show this is not a fear this company can assist with. The Mexican Peso is worth roughly $.05 USD. The Peso has fluctuated only between high .04 -.06 since 2016, with massive dips happening only after Covid-19. This indicates that the peso is a losing (or steady) with the the USD. There could likely be reduced cost and increased spending with the stores being located in Central America. About 31% of Wal Mart de Mexico’s spend is on store expansion in the region.

One last consideration is that Walmart owns 71% of Wal mart de Mexico, which seems to me to hedge it against many problems, being that this is Walmart asset. My assumption would be that these are the same companies in different markets, perhaps with more room for growth. Although, Walmart continues to shatter its own profit records.

At the end of this, I am unsure what to do here and am debating whether to purchase Wal Mart de Mexico or Walmart shares.