Are These The Best Consumer Discretionary Stocks To Invest In Today?
For investors looking out for the most active stocks in the stock market today, consumer discretionary stocks are in focus. Notably, this would come at a rather unique time for the sector in general. On one hand, with the growing concerns over the state of the U.S. economy, most would expect consumer spending to decrease. In this case, rotating out of consumer discretionaries would make sense. However, on the other hand, we have retailers such as Macy’s (NYSE: M) soaring following stellar quarterly results. Also, in the company’s earnings report, Macy’s is raising its profit outlook for the fiscal year. This could indicate that consumers still have discretionary funds to spend.
Moreover, two more consumer discretionary companies to look out for would be Dell (NYSE: DELL) and Ulta Beauty (NASDAQ: ULTA). Overall, both firms posted record first-quarter revenue in their respective financial updates yesterday. For starters, Dell cites its expansive and diverse portfolio as a key driver of growth for the quarter. Dell Co-COO Chuck Whitten also notes that Dell is in a good position to adapt to dynamic growth opportunities in the IT world today. Secondly, Ulta, in its earnings report, saw stronger-than-expected sales and earnings growth throughout the first quarter of 2022. The beauty store chain operator also reports double-digit growth across its major categories.
All in all, both firms provide different offerings and solutions but they cater to consumers nonetheless. With earnings like these coming from the sector, I could understand if investors are looking for the top consumer discretionary stocks around. Should you be one of them, here are three more to check out in the stock market now.
Consumer Discretionary Stocks To Buy [Or Sell] Today
Dollar General Corporation
First up we have Dollar General, a consumer company that helps shoppers save time and money. It offers everyday products like health and beauty aids, along with basic apparel and food & housewares. Furthermore, it has over 18,000 stores across 47 states. In addition to high-quality private brands, it also sells products from manufacturers like Clorox (NYSE: CLX) and Procter & Gamble (NYSE: PG). On Thursday, the company reported its first-quarter financials for 2022.
Diving in, net sales for the quarter were $8.8 billion, an increase of 4.2% year-over-year. It also reported a diluted earnings per share of $2.41. “We are pleased with our start to 2022, and I want to thank each of our team members for their ongoing commitment and dedication to serving our customers every day,” said Todd Vasos, Dollar General’s chief executive officer. “Despite ongoing headwinds due to supply chain pressures and heightened inflation, we remained focused on controlling what we can control and delivered solid financial results, which exceeded our expectations for sales and EPS for the quarter.”
The company’s board of directors also declared a quarterly cash dividend of $0.55 per share. This solid quarter comes as Dollar General executed more than 800 real estate projects and made significant progress in advancing its key strategic initiatives to enhance the value and convenience proposition for its customers. At the end of April, the company also noted that its total merchandise inventories, at cost, were $6.1 billion compared to $5.1 billion a year earlier. All things considered, is DG stock a buy in your book?
Following that, we have Nike, a consumer discretionary company that is also the world’s leading designer and manufacturer of authentic athletic footwear, apparel, and equipment. Its wide variety of products is for both sports and fitness activities. The company also owns Converse, a lifestyle foot and apparel brand. Together, its products are used by millions of users all over the world.
The company has recently jumped into the NFT space. In April, it released its first collection of virtual sneakers called Cryptokicks, which had 20,000 NFTs. One of the sneakers was bought for $134,000 and follows a similar trend as the limited edition physical sneakers that the company sells. As to why consumers are willing to pay that much for virtual sneakers, they could offer the same bragging rights as the real thing. Collectors can also show these NFT sneakers off on social media or in NFT exchanges like OpenSea.
In March, Nike also reported its third-quarter financials for fiscal 2022. Firstly, its third-quarter revenue was $10.9 billion, a 5% increase year-over-year. A chunk of that revenue came from its Nike Direct sales, at $4.6 billion, increasing by 15% compared to a year earlier. Secondly, Nike reported a diluted earnings per share of $0.87 for the quarter. Impressively, the company’s digital business also contributed to this quarter’s growth, driven by double-digit growth across major geographical regions. Given this piece of news, is NKE stock worth adding to your portfolio right now?
Last on today’s list, we have Pinduoduo, one of the largest agriculture-focused tech platforms in China. The company connects millions of agricultural producers with consumers across China and aims to bring more businesses and people into the digital economy. The company also monetizes primarily through advertising and has seen its merchant base expanding rapidly to over 8 million since its founding. Today, the company reported its first-quarter financials for 2022.
Getting straight into it, Pinduoduo posted overall solid figures in its first fiscal quarter earnings call earlier today. According to the press release, the Chinese e-commerce giant’s earnings per share for the quarter is $0.47. Furthermore, Pinduoduo’s total quarterly revenue is $3.75 billion. To compare, this is versus consensus figures of $0.27 and $3.08 billion respectively. In the larger scheme of things, this would be the case as Pinduoduo serves homebound consumers. After all, the recent series of Covid-19 lockdowns in China would lead to an uptick in online spending. For one thing, this quarter’s results would serve to highlight Pinduoduo as a go-to for Chinese consumers. With all this in mind, would you consider PDD stock a top consumer discretionary stock to buy today?