Pawtucket, Rhode Island-based Hasbro is a branded play company providing children and families worldwide with entertainment offerings. From toys and games to motion pictures, television programming, and a licensing program, Hasbro reaches consumers through its well-known brands. Net income came in at $117 million, or $3.06 per diluted share, compared to $119 million, or $2.99 per diluted share, in the previous year. Ann Arbor, Michigan-headquartered Domino’s Pizza is a restaurant operator and franchisor with over 17,800 stores across 90 countries. It had mostly been growing until the pandemic, at which point the demand for delivered goods sent it skyrocketing.
Coffee is undeniably a luxury that people can’t live without – or alternatively, won’t die from lacking it. When the economy starts going bad, people on a tight budget start looking for an alternative for their caffeine fix, such as buying it from the supermarket instead of ordering out. Because of that, one guideline some financial advisors recommend is to devote no more than 10% of your portfolio to individual stocks.
- As a reminder, we expect an unfavorable impact from foreign currency translation of approximately 2 percentage points to 3 percentage points on fiscal year 2023 revenue and earnings, respectively.
- Whether they manufacture cars, design luxury goods or make fast food, consumer discretionary stocks profit from the full range of consumer goods and services.
- As far as consumer discretionary stocks go, Deckers is one of the best from a growth perspective.
- We have assessed the hedge fund sentiment from Insider Monkey’s database of 943 elite hedge funds tracked as of the end of the fourth quarter of 2022.
In this article we will take a look at the 15 best consumer discretionary stocks to buy now. You can skip our detailed analysis of the consumer discretionary industry’s outlook for 2021, and go directly to the 5 Best Consumer Discretionary Stocks to Buy Now. Below are the top consumer discretionary stocks for this month, classified by best value, fastest growth, and most momentum.
Factors to Consider When Choosing Consumer Discretionary Stocks
Off-price retailer TJX (TJX, $74.16) delivered solid fourth-quarter results in late February. On the top line, it brought in $14.52 billion, 4.8% higher than the year earlier. For the entire fiscal year, revenue was $49.94 billion, 2.9% better than in 2022. On the bottom line, it earned 89 cents a share in the fourth quarter, 14.1% higher than a year ago, while full-year earnings increased 9.1% to $3.11 a share. You can buy shares of consumer discretionary stocks in a taxable brokerage account or an individual retirement account (IRA)—a few 401(k) plans may also allow you to purchase individual stocks.
- POOL stock has delivered an annualized total return of over 30% over the past 10 years.
- Consumer discretionary companies are companies that sell non-essential products and services such as entertainment or premium priced products.
- Maintaining sufficient inventory is essential to capitalize on available sales opportunities.
Adjusted EPS in the quarter came in at $0.59, beating estimates by $0.07. Revenue in the quarter jumped 20.9% year over year to $3.94 billion, surpassing estimates by $140 million. During the retailer’s current fiscal year, it expects its earnings per share to come in at $24.70-$25.40, up from $24.01 last year. With most American farmers prospering tremendously amid high food prices, TSCO has unsurprisingly delivered great financial results over the last year. POOL stock has delivered an annualized total return of over 30% over the past 10 years.
Consumer Discretionary Sector Equity
Certain companies are also called “affinity stocks,” or companies that consumers want to invest in because they know and love their brands. The Consumer Discretionary group has plenty of great stocks, but investors should always be looking for companies that are outperforming their peers. Central Garden (CENT Quick QuoteCENT xtb review – Free Report) is a stock that can certainly grab the attention of many investors, but do its recent returns compare favorably to the sector as a whole? A quick glance at the company’s year-to-date performance in comparison to the rest of the Consumer Discretionary sector should help us answer this question.
The monthly returns are then compounded to arrive at the annual return. Only Zacks Rank stocks included in Zacks hypothetical portfolios at the beginning of each month are included in the return calculations. Certain Zacks Rank stocks for which no month-end price was available, pricing information was not collected, or for certain other reasons have been excluded from these return calculations. Finally, the growth rates of revenue fxtm broker reviews and earnings per share are key metrics to consider with any company, and that’s true for consumer durables as well. Investors should prioritize companies that are growing faster than their peers and operating in markets with strong secular growth rates, meaning long-term growth that persists across business cycles. You can use a stock screener to identify companies according to revenue and earnings-per-share metrics.
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. MELI is trading at 5.8 times sales, one of the lowest multiples in the past decade and less than half its five-year average. It’s time to be greedy when others are fearful, especially when it comes to the best consumer discretionary stocks out there.
#3 – NIKE
To create a specific set of companies and their respective stocks that fall under certain criteria, we utilized a screener to examine the top stocks under each criterion. Benzinga offers a list of the best consumer discretionary stocks on the list above. Consumer discretionary stock prices tend to underperform when the economy contracts. 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. It develops the next generation of electric vehicle (EV) technologies.
Features to Look for in Consumer Discretionary Stocks
Richfield, Minnesota-based Best Buy is one of our largest consumer electronics retailers, with product and service sales representing about 10% of U.S. personal consumer electronics and appliances expenditures. Of course you have, with all the consumers who have ensured that the fast-food company continues to sell billions and billions of burgers, along with a lot of other things. Arcos Dorados, which has a market cap of nearly $1.9 billion, is a major franchisee of McDonald’s with exclusives in 20 countries and territories in Latin America and the Caribbean. Given high inflation in 2022, the Federal Reserve has increased interest rates six times this year alone and many analysts expect the central bank to raise rates further. Looking at the weekly chart below, you’ll notice that the company’s stock price outperformed the XLY ETF for much of 2021, but it has been strongly correlated in 2022. From a trader’s perspective, the slight uptick in recent weeks could suggest that the price will return to the type of relative outperformance that it was experiencing previously.
The company is best known for its well-insulated coolers and tumblers that keep food and beverages cooler much longer than competing products. YETI products tend to be expensive, making the company something of a luxury brand, but it’s also developed a cult-like following for its high-performance products. That has helped it deliver solid growth and allowed it to expand its product line into items such as bags and other cargo gear, camping equipment, and even pet accessories.
PDD Holdings Inc. (PDD)
As a result of the company’s better-than-expected performance in the second quarter, it raised its guidance for all of 2023, to revenue of $6.6 billion (2%-3% higher than in 2022), with earnings per share between $3.70 and $3.75. Additionally, the sector’s poor performance in 2022 has made valuations much more attractive in 2023. “While the short-term picture may look murky, there appear to be many instances where stock valuations have overcompensated for macroeconomic concerns,” Michaels says. “In the home-improvement retail industry and others, I have seen strong fundamentals and low valuations – a combination that could be attractive for long-term investors.”
To help you choose the best consumer discretionary stocks for your portfolio, Forbes Advisor has profiled the 10 largest in the industry by market capitalization. Consumer durables stocks offer a wide range of choices for investors seeking portfolio exposure to both the manufacturing and consumer-facing sectors. The cyclical nature of consumer durables also makes the sector a good investment choice during an economic boom, although bear markets can also offer good buying opportunities. Despite reports of job cuts in the news, overall employment is still increasing. Although the number of people filing for unemployment benefits remains low, the effects of the layoffs will eventually become evident, resulting in a decline in total wages and salaries paid.
Selling to the end consumer differentiates them from manufacturers that sell to other businesses or to institutions such as governments, but they are best analyzed in the same way as other manufacturers. RH is the high-end furnishings company formerly known as Restoration Hardware. Although consumer durable companies are typically thought of as manufacturers or wholesale brands, RH, a vertically integrated retailer, clearly fits the category. It outsources manufacturing, like many other consumer durables companies, but designs and sells its own furniture, such as sofas, armchairs, and coffee tables, at dozens of its “galleries” and online. Below are three of the top consumer durables stocks on the market today.
“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. At the end of 2022, MercadoLibre had a loan portfolio of $2.8 billion. Its loan portfolio growth was driven higher by consumer loans (55% of loans) and credit cards (22%). On a currency-neutral basis, MercadoLibre’s revenue from its Argentina operations increased by 143%.
The report states that over 50% of the consumers, including millennials, plan to spend extra on beauty products, electronics, and apparel. Deloitte’s report, United States Economic Forecast, also stated that PCE is expected to grow by 7.6% in 2021. These are the consumer discretionary stocks that had the highest total return over the past 12 months. When looking for brokerage company: trader’s way a good consumer discretionary stock, investors should consider factors such as the company’s financial stability, its ability to generate revenue and profit, and its competitive advantages. Finally, it’s important to be patient when you’re investing in the consumer discretionary sector. This sector can be volatile, so it’s important to have a long-term perspective.