Are These The Best Consumer Discretionary Stocks To Buy Right Now?
Among the various sectors in the stock market, consumer discretionary stocks appear to be gaining momentum as investors anticipate booming economic growth through the rest of the year. With the rate of vaccines being administered in the U.S., it would lead to a speedy reopening of the nation’s economy. And that bodes well for top consumer discretionary stocks. This sector comprises companies that sell goods and services that are considered non-essential. Some of the biggest names in the sector would include Home Depot Inc (NYSE: HD), Nike Inc (NYSE: NKE), and even Apple Inc (NASDAQ: AAPL). As some of you would expect, companies within this sector tend to be more volatile as they rise and fall with broader economic trends.
With COVID-19 seemingly subsiding in the U.S., it’s natural that some sectors that were previously battered by the pandemic are seeing strong rebounds in the demand for their products and services. After all, with tens of millions of people getting vaccinated against the insidious virus in the U.S., people are spending more time outdoors again. And that makes many top consumer discretionary stocks potentially worth buying, creating huge opportunities for many investors. If you’re a believer in the economic recovery narrative, do you have this list of top consumer discretionary stocks to buy in the stock market today?
Top Consumer Discretionary Stocks To Watch
- Pinduoduo Inc (NASDAQ: PDD)
- McDonald’s Corp (NYSE: MCD)
- Starbucks Corporation (NASDAQ: SBUX)
- Tenneco Inc (NYSE: TEN)
Pinduoduo is a Chinese e-commerce platform operator. Its mobile e-commerce platform provides value-for-money merchandise and interactive shopping options. PDD stock has been quite impressive over the past year. It has more than doubled in price during this period.
Last week, the company announced its first-quarter earnings report. Its revenue spiked by 239% to $3.4 billion compared to the prior year’s quarter. Out of which, the online marketing services and others contributed $2.15 billion, an increase of 157%. In addition, there was also an increase of 31% in active buyers, now at 823.8 million. Given that China’s new three-child policy has come into play, these numbers could improve as time goes by.
Ever since its IPO back in 2018, the company has slowly emerged as a legitimate challenger to Alibaba Group (NYSE: BABA) and JD.com Inc (NASDAQ: JD) in the Chinese e-commerce space. Many attribute this to Pinduoduo’s relentless growth and increasing popularity of its business model. That said, PDD stock has retraced by more than 30% from its peak back in February. So, could this be a perfect opportunity to load up on PDD stock?
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Next, we have one of the leading fast-food restaurants in the world, McDonald’s. Now, who doesn’t know McDonald’s? It serves a locally relevant menu of food and drinks at more than 39 thousand restaurants in over 119 markets globally. After its sell-off back in March 2020, MCD stock has been on an upward trajectory. In the past year, the stock has soared by almost 25%.
In April, the company posted its first-quarter earnings report. Global comparable sales increased 7.5% and consolidated revenues increased by 9%. Also, consolidated earnings increased by 35% which includes the $135 million related to the sale of McDonald’s Japan stock. If we were to exclude these, then net operating income would be an increase of 27%. As we can see, the company has begun to lap the significant impact of COVID-19 on its global results beginning in March 2020.
On top of that, McDonald’s also announced it will increase the allocation of advertising dollars to diverse-owned media companies, production houses, and content creators over the next four years. This would help bolster individual businesses while creating deeper relationships with McDonald’s diverse customer base. With that in mind, would you consider buying MCD stock?
Starbucks Corporation operates as a roaster, marketer, and retailer of specialty coffee worldwide. Its stores offer coffee and tea beverages, roasted whole bean and ground coffees, single-serve and ready-to-drink beverages, and various food products. Starbucks operates more than 32,000 stores worldwide, a figure which has doubled over the past decade. Fortunately for its investors, the company’s stock also follows the same trajectory. In fact, SBUX stock has almost doubled in price just within the past year.
In April, the company reported its fiscal second-quarter 2021 results. The company appears to be recovering from the impact of the pandemic. In particular, global comparable store sales for the quarter were up by 15%, largely driven by a 19% increase in the average amount of sales per customer. To top it off, GAAP earnings per share were $0.56, doubling from the prior year. This demonstrates an impressive momentum in its business with sales recovery and illustrates its ability to adapt to changes posed by the pandemic.
These are exciting times for the company as it focuses on international store growth. With plans of reducing the number of stores in the U.S., it plans to open 95% of its new stores internationally in the fiscal year 2021. This would likely improve its operating margins as store operation expenses are lower in the international segment. All things considered, is SBUX stock a top consumer discretionary stock to buy?
To sum up the list, we have Tenneco Inc. The company is one of the world’s leading designers, manufacturers, and marketers of automotive products for original equipment and aftermarket customers. Through its four business groups, Motorparts, Performance Solutions, Clean Air, and Powertrain, Tenneco is driving advancements in global mobility by delivering technology solutions for the diversified global market.
Last week, one of Tenneco’s businesses, Ӧhlins Racing, has been selected as the exclusive provider of shock absorbers for the NASCAR® Cup Series “Next Gen” car platform scheduled to debut in 2022. It will be supplying to all NASCAR Cup Series teams a highly advanced, five-way adjustable version of the popular Ӧhlins TTR coil-over damper. This further illustrates that the company’s strong heritage in racing has gained the recognition it deserves.
Back in May, the company reported its first-quarter financial results. Total revenue climbed 23% year-over-year to $4.7 billion. Out of which, value-add revenue increased to $3.6 billion, 13% higher compared to the prior-year quarter. Meanwhile, net income came in at $65 million, compared to a net loss of $839 million last year. Thus, it is safe to say that the company is trending in the right direction. So, could this be the right time to invest in TEN stock?