Will You Have These Top Retail Stocks On Your Watchlist?
Retail stocks have had a very interesting year in the stock market. This is no thanks to the coronavirus pandemic of course. Fewer people could visit these retail companies with lockdown measures in place. Top retail stocks, in general, have had their store shuttered as the U.S. tackles the pandemic. However, things are starting to turn for the better. With Moderna’s (MRNA Stock Report) and Pfizer’s (PFE Stock Report) positive vaccine news last month, retail stocks have begun rallying. A vaccine will soon be distributed and this would mean that things could finally return to normal. When the virus is finally eradicated, people will frequent their favorite retailers again.
A quick look at the S&P Retail Select Industry Index, which focuses on retail stocks will show you that the index is up by 125% since the stock market crash in March. This is an impressive feat as these top retail stocks to buy have not only managed to recover from their correction from the pandemic but have since made further gains. For instance, luxury department store Nordstrom (JWN Stock Report) has skyrocketed by 115% in the past month alone. The largest department store chain in the U.S., Kohl’s (KSS Stock Report) has also enjoyed a 77% increase in share price in the same period.
It is evident that retailers who could adapt to the shift in customer demands would survive the onslaught that came with the pandemic. For example, by switching to e-commerce, these retailers could offset the losses from their brick-and-mortar stores. With the coronavirus vaccine arriving within the next few weeks, could these retail stocks be heading to even greater heights?
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Best Retail Stocks To Buy [Or Sell] In December 2020: The Kroger Company
Kroger (KR Stock Report) is the fifth-largest retailer in the world and the largest supermarket by revenue in 2019. The company boasts over 2,500 supermarkets and multi-department stores. This includes seamless digital shopping options, price-impact warehouse stores, and fine jewelry stores. KR stock was sliding Thursday morning following its third quarter’s earnings. This came after investors were worried that its pandemic gains may be waning. KR stock plunged 4.3% as of 11.47 a.m. ET. For the full year, Kroger expects to earn between $3.3 and $3.35 a share, ahead of the $3.28 per share that analysts are expecting.
The grocer has been recording strong gains in the past few quarters. As reflected from its previous quarter, Kroger saw its digital sales grow by a whopping 127%. This spike in sales is likely due to the coronavirus causing demand to shift to the e-commerce space. Kroger also reported earnings per share of $1.03, which is a 66% increase compared to a year earlier. Total company sales for the company was a staggering $30.5 billion in this quarter.
Kroger’s strong digital business is a key contributor to this growth. This company has made investments to expand its digital ecosystem and this seems to be paying off well. Kroger has shown that it is a trusted brand as customers choose to shop with the retailer. This is the clearest indication that retailers will come out stronger than ever if they can adapt. With that in mind, will you consider adding KR stocks to your portfolio?
Best Retail Stocks To Buy [Or Sell] In December 2020: Dollar General Corporation
Next on this list is retail giant Dollar General (DG Stock Report). Dollar General strives to make shopping hassle-free and affordable with over 17,000 convenient stores in 46 states. It proudly claims to be America’s neighborhood general store and has every right to do so. Offering a variety of items at low prices, the company is committed to its mission of Serving Others since the company’s founding in 1939. DG stock is up by 40% year-to-date.
The company has just announced its third-quarter fiscal results today and have beaten analyst expectations. Dollar General has seen net sales increased by 17.3% to $8.2 billion in this latest quarter. This is impressive as Dollar General had positive sales contributions from stores despite modest offset by the impact of store closures. The company saw its operating profit increase by 57.3% to $773.1 million in this quarter. It does show how Dollar General can manage its supply chain effectively even during a pandemic. To top things off, the company also reported diluted earnings per share of $2.31, which is a 62.7% increase year-over-year.
Dollar General also offers a cash dividend and has returned $990 million to shareholders in this quarter. The company’s formula seems to be paying off. It notably targets the smaller markets that bigger rivals like Walmart (WMT Stock Report) would shun. Impressively, the company’s store count has doubled in just 10 years. Despite the pandemic, the company has never posted lower revenue in any quarter in over 10 years as well. With such solid financials and growth, will DG stock be a top retail stock to buy?
Best Retail Stocks To Buy [Or Sell] In December 2020: Costco Wholesale Corporation
Costco (COST Stock Report) is a go-to retail stock for many seasoned investors. The company is a multi-billion-dollar global retailer with warehouse club operations in eight countries. Costco dedicates to quality in every area of its business as it is a leader in the retail industry. The company is one of the few retail stocks that were unscathed by the pandemic. Costco stocks are up by 31% year-to-date.
Fresh of its first-quarter fiscal that was reported yesterday, Costco reported a net sales increase of 16.9% at $42.35 billion. The company also reported $15.67 billion in November alone. This reflects heightened consumer demand for the company’s food products and other merchandise as the pandemic continues to spread. Costco seems to be benefiting from the same trend as retailers like Target (TGT Stock Report). As customers are less likely to travel or dine out, they resort to spending in essentials and discretionary categories.
What makes Costco a consumer favorite is the fact that it can consistently offer low prices. This in a time of economic uncertainty has helped Costco gain a larger market share. The pandemic has certainly forced many consumers to depend on affordable goods and necessities. Costco is synonymous with affordability, so the company certainly will gain from the pandemic. The company also invested heavily in its e-commerce segment. It is reported that its digital channel is running higher by about 90% in recent months. This momentum is likely to continue in 2021 given Costco’s strong fundamentals. For these reasons, COST stock could be a top retail stock to watch this month