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He has been featured by CNBC, Fox Business, Bloomberg, and MarketWatch. McDonald’s began as a single hamburger stand in San Bernardino, Calif., that blossomed into an international franchise giant, practically inventing fast food along the way. By the early 21st century, McDonald’s had more than 34,000 stores in over 115 countries. The retailing industry group might sound self-explanatory — but it’s a bit harder to define than you might think. Many or all of the products featured here are from our partners who compensate us. This influences which products we write about and where and how the product appears on a page.
Compared to most of its competitors, it is still moving in a positive direction on the earnings front. In this article, we discuss 13 best consumer discretionary stocks to buy. If you want to see more stocks in this selection, check out 5 Best Consumer Discretionary Stocks To Buy. The company’s business has generated wide profit margins and solid growth over the years.
Definitive Historical Return Data For Consumer Discretionary Equities ETFs
The following table displays sortable historical return data for all ETFs currently included in the Consumer Discretionary Equities ETF Database Category. For information on dividends, expenses, or technical indicators, click on one of the tabs above. To do so, begin by clicking the filter icon at the top of the price-to-earnings column, as shown below. Click here to instantly download your free spreadsheet of all Consumer Discretionary Stocks now, along with important investing metrics. Investment decisions should be based on an individual’s own goals, time horizon, and tolerance for risk.
- By the early 21st century, McDonald’s had more than 34,000 stores in over 115 countries.
- However, the magnitude of rate hike has reduced to quite an extent in 2023 as the inflation rate has declined steadily from its peak in June 2022.
- Founded in 1933 as a subsidiary of Toyota Automatic Loom Works, the company released its first production car in 1936.
- Schedule monthly income from dividend stocks with a monthly payment frequency.
- Often, the best consumer discretionary stocks are not the cheapest to buy into.
CNBC’s Jim Cramer on Friday offered investors a list of seven stocks he believes could be great additions to investors’ portfolios. An exchange-traded fund (ETF) is an investment fund that tracks an index, a commodity, or a basket of assets like an index fund but trades like a stock on an exchange. ETFs are one of the fastest-growing products in the investment industry.
Ultimately, cyclical stock investing is a game of patience, and the range of stocks goes beyond the 5 companies described above. But if you’re interested in adding some exposure to a high-growth segment of the economy, these stocks are a good starting point. Closely monitor economic events to better understand which industries are on the road to recovery. Based on this information, you may consider trimming or adding your positions. Remember, however, that cycles can favor some businesses and not others. The market is fickle, and consumers could turn to any other brand or establishment at any time.
Kontoor Brands Announces Second Quarter 2023 Earnings and Conference Call Date
When you invest in consumer discretionary stocks, you’re buying companies that command strong brand loyalty among both their customers and investors. The consumer discretionary sector comprises businesses that sell goods and services, which are considered non-essential by consumers. These are the products that consumers can avoid without any major consequences to their well-being. In fact, these goods are desirable only if the available income of an individual is sufficient to purchase them.
Although several economic indicators have fallen substantially in 2023, the labor market remains resilient. Moreover, inflation is well above the Fed’s 2% target rate despite a massive 5% hike in interest rate from March 2022 to May 2023. A former senior business analyst for Sony Electronics, Josh Enomoto has helped broker major contracts with Fortune Global 500 companies. Over the past several years, he has delivered unique, critical insights for the investment markets, as well as various other industries including legal, construction management, and healthcare. Right now, the business suffers from inflation, forcing management to raise prices due to increasing raw material costs.
TJX Companies
The company remains committed to serving do-it-yourself (DIY) consumers, selling everything from tools and building supplies to gardening materials and home appliances. Recent years have also seen growth of new customer service options, including curbside pickup, buy at home/pickup in store and home delivery. Researching an ETF is often easier than researching individual stocks, but it’s still worth doing, since ETFs are not without risk. Make sure you check out an ETF’s holdings and expense ratio — the percentage fee the fund charges each year — before investing.
That said, there are many well-managed companies in this sector with a proven track record of steady returns even in the worst economic climates. EBay operates one of the largest e-commerce marketplaces in the world, with $85 billion in 2020 gross merchandise volume, or GMV, rendering the firm the fifth-largest global e-commerce company. EBay generates roughly 56% of its GMV in international markets (versus 44% in the U.S.), with a large presence in the U.K., Germany, and Australia. It develops the next generation of electric vehicle (EV) technologies. It is a vertically integrated company that designs, engineers, and builds electric vehicles, EV powertrains, and battery systems in-house using our own equipment and factory.
Best Online Brokers for Consumer Discretionary Stocks
Well, recessions tend to negatively impact the profits (earnings-per-share) of consumer discretionary companies. The remaining stocks in this Excel document are dividend-paying consumer discretionary stocks with price-to-earnings ratios below 20 and market capitalizations above $5 billion. The next screen that we’ll implement is for dividend-paying consumer discretionary stocks with price-to-earnings ratios below 20 and market capitalizations above $5 billion. The acquisition of distributor Interline Brands in 2015 allowed Home Depot to enter the maintenance, repair, and operations business, which has been expanded through the tie-up with HD Supply (2020). The addition of the Company Store brought textile exposure to Home Depot’s lineup.
- Our research team runs the industry’s toughest consumer discretionary dividend screening test and only picks from the top 5%.
- The company was founded in 1971 as coffee roaster at Seattle’s Pike Place Market, and in the intervening five decades it has spread to every corner of the globe.
- When consumers spend money, companies in the consumer discretionary sector often see their sales and profits increase.
- Investing in the consumer discretionary sector can be a great way to achieve long-term growth.
Even though revenue growth has been sluggish during the pandemic, the company has delivered solid profits and has outperformed rivals such as Adidas and Under Armour (UAA 1.66%)(UA 1.38%). Both sales and earnings are critical factors in the success of a company. Companies with https://g-markets.net/helpful-articles/dragonfly-doji-candlestick-definition-and-tactics/ quarterly EPS or revenue growth of more than 1,000% were excluded as outliers. You can also buy a wide variety of consumer discretionary stocks at the same time through an ETF. This is often cheaper — both in dollars and in research time — than buying individual stocks.
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This means that recessions are usually the best time to buy consumer discretionary stocks because their price-to-earnings ratios tend to decline to well below their normal levels. Similar logic suggests that right now is probably not the best time to buy consumer cyclical stocks. You now have a strong fundamental understanding of how to use the consumer discretionary stocks list to find high-quality investment ideas. The consumer discretionary sector is one of the larger constituents of the broader stock market.
Though, Home Depot stock closed Tuesday’s trading session up 0.99% at $296.00 per share. Just last month, The Home Depot announced that its board of directors has approved a cash dividend of $2.09 per share for the first quarter. This marks the 145th straight quarter that the company has distributed a cash dividend. Looking at the last six months, Nike’s stock is trading modestly lower by 1.98%.
Companies in the consumer discretionary sector provide products and services considered luxuries or non-necessities. Some consumer discretionary stocks include companies selling automobiles, apparel and electronics. But economic jitters and concerns that the company’s sales and earnings growth is slowing have investors reluctant to jump on one of the best consumer discretionary stocks there is. Unlike consumer staples companies, which make necessities, consumer discretionary stocks tend to do well when the economy is strong and poorly when times are tough. Keep reading to learn about the consumer discretionary sector and some top stocks to consider.
Get Forbes Advisor’s expert insights on investing in a variety of financial instruments, from stocks and bonds to cryptocurrencies and more. Because of that, one guideline some financial advisors recommend is to devote no more than 10% of your portfolio to individual stocks. Individual stocks offer investors the chance to outperform market indexes like the S&P 500, but they come with some major risks and drawbacks. And the specialty retail industry includes clothing stores such as Nordstrom (JWN), electronics retailers like Best Buy (BBY) and home improvement stores such as Home Depot (HD). The diversified consumer services industry includes everything else that fits under the consumer services umbrella. An education services company like Bright Horizons Family Solutions (BFAM) would be an example.
Best Consumer Cyclical Stocks
As a result of its strong finish, revenues ($1.60 billion) and earnings ($232.67 million) for the year were both records. For 2023, FOXF’s initial guidance calls for $1.69 billion in revenue at the midpoint and $5.30 a share in adjusted earnings, slightly down from $5.49 in 2022. “We believe UGG and HOKA are two of the healthiest, well positioned brands in their respective markets, and with the strength of our operating model, Deckers is poised for continued success going forward,” Powers added.
So, if you’re looking for the best consumer discretionary stocks to buy, here are a few things to keep in mind.Look for companies with strong brands. Home Depot benefits from a strong housing market, as more homeowners undertake projects during this time to improve their households. The company also sells large amounts of consumer staples, which may give its sales some cushioning during a downturn. However, there is not always a direct correlation between interest rates and stock prices. For example, if the economy is weak, then companies may be less likely to borrow money and invest in growth, even if interest rates are low. In this case, stock prices may fall even when interest rates are low.