Wal-Mart Stores, Inc. (WMT), and Three Simple Ways to Profit in Mexico

Costco’s total debt to equity ratio of 0.48 is a little less than Wal-Mart Stores, Inc. (NYSE:WMT)’s and its AA- Morningstar Credit Rating is just slightly lower than Wal-Mart’s. Costco’s gross margin of 13.4% and EBIT margin of 3.0% are around half of Wal-Mart’s margins, but Costco has been able to maintain its profits and growth. Costco is a good company and its smaller size relative to Wal-Mart gives it more room for long term expansion.

Conclusion

Mexico is growing country with easy access to the U.S. market. Wal-Mart Stores, Inc. (NYSE:WMT) is attractive because of its healthy margins and significant presence in Mexico. Costco is attractive because its smaller Mexican footprint gives it more room to expand into Latin America. The Latin America Equity Fund is a closed-ended fund trading at a significant discount around 10% of its NAV. Investors willing to watch the premium/discount rate are able to buy a piece of Mexico without paying full price. Each of these investments is a strong opportunity to add a little bit of diversification to your portfolio.