Are These The Best Retail Stocks To Buy Right Now?
Retail stocks are very exciting to watch these days. This is because of shifting customer shopping priorities. This shift in trend has affected the outcome of these retail stocks’ performance in the stock market. Today, more people are adapting to the new normal that was brought upon at the onset of the pandemic. Despite the initial beating that top retail stocks took at the start of the pandemic in March 2020, these stocks are gaining momentum again. The S&P 500 Consumer Discretionary which focuses on consumer goods and services has increased by 67% in value since March. These retail companies have returned to their pre-COVID market cap and have since made even further gains.
So what are retail stocks exactly you may ask? Retail stocks are stocks that depend on their consumer base. Retail companies usually sell a form of consumer goods or provide services to consumers. By going through multiple channels of distribution, these companies will then earn a profit. By having a robust supply chain, these companies can meet their consumer demands. Take Amazon (AMZN Stock Report) for instance. The company boasts an intricate supply chain complex that can cater to the needs of its millions of customers worldwide.
Kroger (KR Stock Report), one of the largest grocery retailers in the US, boasts an incredible supply chain. The company uses blockchain technology from IBM (IBM Stock Report) for traceability of its products. With that, it can trace food from the farm to its shelves. These are some companies who have adapted to the new era that we live in. With that in mind, here are 3 top retail stocks to watch in the stock market today.
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Best Retail Stocks To Buy [Or Avoid] in November: Target Corporation
Retail giant Target (TGT Stock Report) has been one of the biggest winners so far in the retail industry. The stock has enjoyed a 31% increase in share price year-to-date and is currently at $155.21 per share. As many businesses were forced to close and lockdown measures were in place, Target was one of the few retailers that could operate during the pandemic.
In the company’s second-quarter fiscal posted in August 2020, the company recorded an increase of 24.3% in sales. This is the strongest growth that the company has ever reported. It also saw its store comparable sales increase by 10.9% while digital comparable sales grew by a whopping 195%. The company has also gained approximately $5 billion in market share across all 5 of its core merchandise categories.
With the commendable figures from Target’s Q2, you can see why the company has enjoyed such success recently. By boasting a huge diversification in products, it sells both discretionary items and staples. By providing all sorts of products under one roof, customers can consolidate their trips. Target boasts a wide merchandising assortment and a comprehensive set of convenient fulfillment options. For this reason, the company is well-equipped to navigate the ongoing challenges of the pandemic. The company has also stated in its financial outlook that it will continue to grow with profitability in the years ahead. With that in mind, could TGT stocks be worth adding to your portfolio?
Best Retail Stocks To Buy [Or Avoid] in November: Home Depot Inc.
The largest home improvement retailer in the US is a title owned by Home Depot (HD Stock Report). This retail company is a household name when it comes to tools and construction products. HD stocks have been up by about 77% since the March lows. This is an amazing feat for a retail company that had initially lost over 60% of its share value at the start of the market crash this year.
The company reported net earnings of $4.3 billion or $4.02 per diluted share in the second quarter posted in August. This represented a 22.8% increase compared to a year earlier. On top of that, Home Depot had reported $38.1 billion in sales, an increase of 23.4% compared to year-over-year. This remarkable performance is driven by the investments the company had made before and during the pandemic. It allowed the company to respond quickly to changes while continuing to promote a safe operating environment. This had enhanced the team’s ability to work cross-functionally to better serve customers and deliver record-breaking sales in the quarter.
Year-to-date, Home Depot has invested $1.3 billion in safety, enhanced pay, and benefits in response to the pandemic. By doing so, it compensates its workers well enough and promotes a safe environment for both workers and consumers. This, in turn, boosts customer trust in the company and encourages them to continue frequenting Home Depot. Home Depot has also invested in the e-commerce space. In its last quarter, the company had recorded a 100% growth in online orders. As Home Depot has shown such a solid record so far, this makes HD stock a potential retail stock to buy.
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Best Retail Stocks To Buy in November 2020: Lowe’s Companies Inc.
Lowe’s (LOW Stock Report) has also enjoyed tremendous success recently. The company specializes in home improvement as well and has followed the same trend as Home Depot had experienced. The company has seen a 148% increase in its stock value from the March lows. As consumer trends shifted and with more people staying at home, consumers now have the time to carry out various home improvement works.
The company has begun its holiday deals this week. It has also revealed a broader mix of merchandise that is aimed at making homes more cozy, festive, and fun. Americans are spending more of their hours at home, converting their garages into gyms, and cooking more at home. Despite Spring being the peak season for the home improvement industry, this holiday season could yield better sales for the company. Among the changes coming from this holiday season is that Lowe’s will offer free delivery of fresh Christmas trees and wreaths.
In its second-quarter fiscal, the company has reported sales of $27.3 billion, up by 30% compared to a year earlier. Comparable sales for the home improvement business increased by 35.1% in the second quarter. Primary drivers for its sales increase were consumer focus on home, core repair, and maintenance activities. By placing the highest priority on protecting the health and safety of the community, the company is able to shine where most retailers could not. Also, through Lowe’s retail fundamentals strategy, the company had dramatically improved its technology and operating platforms. This had enabled them to meet customer demands and grow their business. All things considered, does this make LOW stock, a stock to buy?