Stocks fell hard on Friday, just as everyone knew would happen after Britain voted to leave the European Union. Fulfilling what was perhaps the only sure-fire result of the Brexit scenario, the Dow Jones Industrial Average, S&P 500, and Nasdaq each declined about 3% by midday.
Although Walmart’s stock rose just barely—up less than 1%—it was the lone survivor of the Brexit vote carnage because the big-box retailer has several attributes that uniquely insulate it from the aftermath of the U.K. referendum.
First, Walmart’s business is primarily based in the U.S., with only about a quarter of its $478.6 billion in annual revenue coming from international markets. Should Britain’s exit from the EU make trade more difficult in that country as is expected, Walmart won’t be affected much, as England only represents a small slice of its business anyway.
Second, because Walmart is a discount retail store, it tends to be more of a defensive stock, one that investors turn to when they’re worried about the economy, which is the primary concern with the Brexit results and the cause of the market selloff. If the economy slows and people lose their jobs in the aftermath of Britain’s withdrawal, they may shop more at Walmart as a way of pinching pennies.
Finally, Walmart stock offers something that’s likely to become even more rare following Brexit: a dividend yield of 2.8%. Because interest rates remain near historical lows, Walmart’s dividend yield is already much higher than the yield of the typical U.S. Treasury bond. And now that the Brexit decision has thrown global markets into uncertainty, interest rates are now more likely to stay low even longer, with some investors predicting that the Fed won’t even raise rates at all this year anymore, despite the two rate hikes that it previously planned. In that case, investors will probably seek yield in dividend stocks like Walmart.
On top of that Walmart is somewhat of a good buy right now. The stock has a price-to-earnings ratio 16, which makes is lower than the P/E of the average stock in the S&P 500 at 19, and significantly lower than the P/E of 288 of its digital rival Amazon (amzn), shares of which dropped $23 on Friday.