Consumer discretionary stocks are those that relate to consumer spending on non-essential goods and services. These can include items like automobiles, clothing, entertainment, and restaurants. For example, some of the more popular consumer discretionary stocks are names like The Walt Disney Company (NYSE: DIS), and Nike Inc. (NYSE: NKE). In addition to that, consumer discretionary stocks tend to be more volatile than other types of stocks, as they are sensitive to changes in consumer spending patterns. For example, during an economic recession, consumers may cut back on spending on discretionary items in order to save money.
As a result, the stock prices of companies in the consumer discretionary sector may decline. However, when the economy is doing well, consumer discretionary stocks can perform very well. Companies in this sector often benefit from increased consumer spending power and rising disposable incomes. For investors looking for growth potential, consumer discretionary stocks can be an attractive option among stock market investors. . If this has you keen on investing in the consumer discretionary sector, here are three companies to check out today.
Consumer Discretionary Stocks To Watch Now
- The TJX Companies Inc. (NYSE: TJX)
- Target Corporation (NYSE: TGT)
- Starbucks Corporation (NASDAQ: SBUX)
1. The TJX Companies Inc. (TJX Stock)
First up, we have TJX Companies Inc. (TJX). In short, TJX Companies is an American multinational off-price department store chain. Some of the company’s brands include names like TJ Maxx, Marshalls, HomeGoods, and Sierra Trading Post. In reference to scale, as of January of this year, TJX operated approximately 4,700 stores globally, as well as five e-commerce businesses.
TJX Recent Stock News
In August, TJX Companies reported its second quarter 2022 financial results. Diving in, the company reported earnings of $0.69 per share, along with revenue of $11.8 billion for Q2 2022. Meanwhile, Wall Street’s consensus estimates for the quarter were earnings of $0.67 per share and revenue of $12.1 billion. Additionally, TJX said in the release that it estimates 3rd quarter earnings of $0.77 to $0.81 per share. They also said they now project full-year fiscal 2023 earnings between $3.05 to $3.13 per share.
Ernie Herrman, Chief Executive Officer and President of The TJX Companies, Inc., stated, “I am very pleased that our second quarter pretax profit margin exceeded our plan and earnings per share were at the high end of our guidance. We believe our strong profitability speaks to the strength and flexibility of our off-price business model, sharp execution of our teams, and expense discipline.“
Separate from that, earlier this week, the company’s Board of Directors declared a quarterly dividend on its common stock of $0.295 per share. This results in an annual dividend yield for TJX of 1.90%.
TJX Stock Chart
Meanwhile, TJX stock is still down just under 18% so far this year. Though, shares of TJX company’s stock have rebounded by over 4% in the last 6 months of trading. On Thursday, the stock closed at $62.01 per share. All in all, will you be keeping TJX stock on watch right now?
2. Target Corporation (TGT Stock)
Following up, let’s dive into retail giant Target Corporation (TGT). For starters, Target operates over 1,900 stores across the United States. As of the end of 2021, Target Corporation is the seventh largest retailer in the United States, behind Walgreens Boots Alliance Inc. (NASDAQ: WBA). In addition, the company offers a variety of products and services, including apparel, home decor, and health and beauty products. Target also offers a wide range of digital services, such as online shopping and mobile apps. For a sense of scale, today Target has nearly 2,000 retail locations. Currently, investors who own Target stock enjoy an annual dividend yield of 2.67%.
TGT Recent Stock News
Last month, Target announced weaker-than-expected second-quarter 2022 results. Diving in, the company reported earnings of $0.39 per share, along with revenue for the quarter of $26.0 billion. This fell short of analysts’ consensus estimates which were earnings of $0.71 per share, on revenue of $26.1 billion. Moreover, Target reaffirmed its fiscal 2023 revenue estimates of $107.1 billion to $112.4 billion.
Moving along, just today the company announced its Board of Directors has declared a quarterly dividend of $1.08 per common share. This announcement represents the 221st consecutive quarterly dividend paid by Target since October 1967.
TGT Stock Chart
So far in the stock market this year, shares of Target stock have dropped over 34%. On Thursday, TGT stock closed the trading day at $152.96 per share. Given the company’s history, do you think now is the time to invest in Target stock at these current price levels?
3. Starbucks Corporation (SBUX Stock)
Lastly, Starbucks Corporation (SBUX) is an American coffee company and coffeehouse chain. The company is the largest coffeehouse restaurant in the world. For a sense of scale, as of January of this year, Starbucks had over 34,300 stores open worldwide, with approximately 17,000 of those located in the United States. Currently, SBUX stock has an annual dividend yield of 2.40%.
SBUX Recent Stock News
In September, Starbucks named a replacement for its long-standing CEO Howard Schultz. In detail, the company has appointed Laxman Narasimhan as the company’s next Chief Executive Officer. This transition is set to take effect starting October 1st, 2022.
Furthermore, last month Starbucks reported a beat for its 3rd quarter 2022 financial results. Diving right in, Starbucks reported revenue of $8.2 billion, along with earnings of $0.84 per share. This is versus analysts’ consensus estimates for Q3 2022 of $0.77 earnings per share, and revenue estimates of $8.1 billion. Also, Starbucks announced revenue growth of 8.7% on a year-over-year basis.
The company’s Chief Financial Officer Rachel Ruggeri had this to say about the quarter, “We delivered record-breaking revenue performance during the quarter from continued strength in customer demand globally, balanced with our ability to execute investments despite macroeconomic and operational headwinds. Our commitment to deliver shareholder value has not wavered, and we are making the right decisions and investments today for the future of Starbucks.”
SBUX Stock Chart
Year-to-date Starbucks stock has been beaten down by just over 27%. As of Thursday’s closing bell shares of SBUX stock are trading at $84.70 per share. With that, are you going to add Starbucks stock to your consumer discretionary stocks watchlist?