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3 ETFs For Walmart Earnings

3 ETFs For Walmart Earnings

Dow component Walmart (NYSE: WMT), the world's largest retailer, reported third-quarter adjusted earnings per share of $1.16 Thursday, beating the $1.09 consensus estimate, and sales of $128 billion that missed a $128.63-billion estimate. 

The stock is up nearly 30% year-to-date, ranking as one of the best-performing large-cap consumer staples names this year, and the results come after a beat-and-raise second quarter. 

For traders looking for some trickle-down impact of Walmart's earnings report without being directly involved with the shares, the following exchange traded funds could move on Walmart results today.

Consumer Staples Select Sector SPDR (XLP)

Although Walmart has market capitalization north of $346 billion, it does not command a weight of 10% or more in any ETF. It's pretty close in the Consumer Staples Select Sector SPDR (NYSE: XLP) at a weight of 9.12%, making the retailer the fourth-largest holding in the biggest staples ETF.

Walmart is one of four Dow components found among XLP's top 10 holdings. For the week ending Nov. 12, investors yanked $209.49 million from XLP, a total surpassed by just six other U.S.-listed ETFs. That could be a sign market participants are favoring higher beta, riskier sectors into the year end.

If Walmart offers up bullish commentary regarding the holiday shopping season, some investors could be compelled to revisit XLP and its 2.58% dividend yield.

VanEck Vectors Retail ETF (RTH)

At a weight of 9.14%, Walmart is certainly an important member of the VanEck Vectors Retail ETF (NYSE: RTH) lineup.

The retailer is the third-largest stock in the fund and represents more than a third of the 24.7% RTH allocates to the consumer staples sector. RTH also vies with the aforementioned XLP for the distinction of having the largest weight to Walmart among all ETFs.

Given RTH's 65.5% weight to the consumer discretionary sector, Walmart saying it expects good tidings this holiday season could potentially be impactful for RTH, even though Walmart isn't a consumer cyclical stock.

Although Walmart means something in RTH, (NASDAQ: AMZN) is the big kahuna in this ETF, controlling 19.57% of the roster.

First Trust Nasdaq Retail ETF (FTXD)

The First Trust Nasdaq Retail ETF (NASDAQ: FTXD) is one of the overlooked names in the retail ETF space. The fund tracks the Nasdaq US Smart Retail Index, which is a smart beta gauge of retailers. The index uses volatility, growth and value metrics to construct its portfolio with Walmart checking the volatility and value boxes.

The Dow component is the largest holding in FTXD at a weight of 7.85%, making this perhaps the only ETF where the retailer is the largest holding.

Walmart shares were trading 2.84% higher at $124.41 in Thursday's premarket session. 

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Photo by Mike Kalasnik via Wikimedia


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