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Walmart Amazon Doe

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Wal-Mart
Wal-Mart is a cash cow. During the company's fiscal 2016, which recently ended, the company generated a whopping $27.4 billion in operating cash flow and $15.9 billion in free cash flow. Even more, since this cash flow is so steady and consistent, the company can confidently pay about about two-thirds of its annual free cash flow in dividends. Indeed, the company is confident enough in its free cash flow that Wal-Mart announced earlier this month it would be increasing its annual dividend payout from $1.96 to $2.00.

But the brick-and-mortar retailer is facing some challenges when it comes to growing its business. During Wal-Mart's fiscal 2016, the company's revenue declined 0.7%. The decline was attributable primarily to currency headwinds and store closings. Adjusting for currency headwinds, revenue increased 2.8%. Going forward, the sales outlook is even more bleak; the company recently slashed its outlook for fiscal 2017 revenue growth from 3% to 4% to expectations for net sales to be "relatively flat."

Amazon.com
Amazon stands out as the fast growing company of the two. Sales were up 20% in 2015, easily trumping Wal-Mart's inability to grow its top line. And with Amazon management guiding for 17% to 28% year-over-year revenue growth for the current quarter, the company clearly isn't expecting a deceleration anytime soon.

Amazon Stock

Beyond growing its top line, Amazon is also recently demonstrating to investors it can beef up its free cash flow. Free cash flow in 2015 was $7.3 billion, up from $2 billion in the year-ago quarter. EPS also jumped from $0.52 to $1.25 -- still small but a move in the right direction.

When it comes to valuation, the market clearly doesn't expect as much from Wal-Mart as it does from Amazon. Wal-Mart's smaller market cap of $203 billion versus Amazon's of $248 billion despite the fact that Wal-Mart's $15.9…...

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