Walmart shares are set for their best yearly gains in over two decades as the retail behemoth's low prices for everyday essentials give it an edge over competitors facing weak demand from budget-conscious consumers.

The stock has gained about 60% so far this year, outstripping gains of about 13% in the S&P 500 Consumer Staples sector index, as well as a 21% rise in the S&P 500 Consumer Discretionary index.

Rival Target's shares are up about 7% this year, while the benchmark S&P 500 has risen 23%.

The stock jumped 106% in 1998 when the company was expanding its supercenter store format, and solidifying its position in Canada and Mexico.

The record jump was sandwiched between a roughly 70% rise in Walmart's stock price in 1997 and 1999.

"Organic growth along with a strong balance sheet and low levels of debt make Walmart a very popular stock right now," said Brian Mulberry, client portfolio manager at Zacks Investment Management.

Walmart is set to report its third-quarter results on Tuesday, Nov. 19, and is expected to post a roughly 4% rise in revenue and 5% growth in adjusted operating income, according to estimates compiled by LSEG.

The retail bellwether has started to benefit from investments in its ecommerce and advertising businesses that have helped the company grow its operating income at a faster clip than its revenue.

The company has invested billions over the last few years on automation in its supply chain to help stock fresher produce at its stores and improve delivery times as consumers increasingly prefer the convenience of purchasing groceries online.

"Walmart is just increasing its addressable market. Their execution has been great, especially against Amazon, which does not have its logistics networks built out in rural parts of America like Walmart does," said David Wagner, head of equities and portfolio manager at Aptus Capital Advisors.

Walmart has also focused on high-margin revenue streams such as its marketplace and retail media units to support steady demand for lower-priced essentials at it supercenters.

Growth in Walmart's advertising and membership segments accounted for more than 50% of its operating income growth in the second quarter, CFO John Rainey said on a post-earnings call in August.

While Walmart's advertising business, which was launched in 2019, is at a much more nascent stage than powerhouse Amazon, the grocer has been seeing strong growth in the unit over the last few quarters, outpacing gains at Amazon's more diverse platform.