Top 10 Retail Stocks worth Investing In

Individual customers and households can purchase a variety of finished items, both durable and non-durable, from the retail industry. Services are also sold in this industry. Apparel, electronics, furniture, kitchenware, athletic goods, books, and toys are among the items sold by retailers. 

 

Some even have grocery stores, pharmacies, auto parts stores, and gardening supply stores. Traditional brick-and-mortar merchants, as well as new e-commerce businesses, are all part of the industry.

 

 

Retail Stocks

 

Walmart Inc. (WMT), Amazon.com Inc. (AMZN), and Costco Wholesale Corp. are among the largest retailers (COST). During the COVID-19 epidemic, store earnings and revenue have fluctuated greatly. Many brick-and-mortar stores have seen significant reductions, while those with a strong e-commerce presence have thrived.

 

The SPDR S&P Retail ETF (XRT), which tracks retail stocks, has outpaced the market dramatically. Over the previous 12 months, XRT has delivered a total return of 85.9%, outperforming the Russell 1000's 37.1 percent.

 

 

Top Retail Stocks

 

Below we have listed around Ten of the Top Retail Stocks across the stock market. All the stock pricing details have been taken from Yahoo Finance :

 

1. Amazon

 

Amazon.com (NASDAQ: AMZN), the world's largest e-commerce company, began by selling books and has now evolved into a marketplace that allows for the online purchase and sale of practically everything. Amazon's 2017 acquisition of Whole Foods Market provides it with a ready-made network of physical retail locations with which to engage customers.

 

With Jeff Bezos, the company's founder and CEO, stepping down in July 2021, Amazon is entering a new era. Only time will tell how the company's leadership change will influence the stock, but as consumers continue to shift to online shopping, Amazon stock is poised to perform well.

 

Below is the stock price change of the platform, as per Yahoo Finance, as on 30th November, 2021:

 

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Amazon Stocks Price Change (source)

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2. Home Depot

 

The home improvement store is noted for its large-format warehouse stores and vast stocks. Home Depot (NYSE: HD) is regularly increasing sales and earnings by serving both do-it-yourself homeowners and professional contractors. While mostly keeping would-be competitors at bay, the business has created a sizable e-commerce presence.

 

With the huge increase in consumers embarking on home repair projects during the epidemic, Home Depot's sales surged. Even when the pandemic in the United States declines, strong demand for housing is keeping sales volumes high.

 

 

3. Lululemon Athletica

 

Lululemon Athletica (NASDAQ: LULU) began as a pioneer in athletic wear, specializing in attire for yoga practitioners. The brand has increasingly attracted a broader range of customers who want to stay fit and look good in their clothes.
 

Early in 2020, store closures owing to the pandemic impacted Lululemon's performance, but the retailer has rebounded well. In the second quarter of 2021, revenue increased by 61 percent year over year, with revenue from retailers increasing by 142 percent. As buyers returned to shopping in person, Lululemon's direct-to-consumer business grew modestly by 8%.

 

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4. Ulta Beauty

 

Ulta Beauty (NASDAQ: ULTA) capitalizes on the trend of providing experiences that entice people into stores by providing in-store salon treatments. Before the epidemic, the concept had taken off, and the businesses were bustling with consumers.

 

Stay-at-home orders hurt Ulta's revenue last year, and they continued to do so as the year progressed. 2021 has shaped  up to be a lot better. Ulta's comparable sales increased by 56 percent in the second quarter, virtually entirely due to an increase in transactions. Customers are flocking back in droves.

 

 

5. Walmart

 

Walmart (NYSE: WMT), the largest retailer in the United States, became famed for its "always cheap pricing." Walmart recognizes the value of having a strong online presence, despite its numerous store locations. During the epidemic, the company's online sales increased, and its grocery pickup and delivery services are in great demand in the present climate.

 

Below is the stock price change of the platform, as per Yahoo Finance, as on 30th November, 2021 :

 

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Walmart’s Stocks Price Change (source)

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Free delivery for online grocery orders is included in the Walmart+ membership program, which is likely to help the company attract new customers. Although sales growth has slowed this year, Walmart continues to gain market share in the grocery sector while rapidly expanding its e-commerce operation.

 

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6. Wayfair

 

The pandemic was a benefit for Wayfair (NYSE: W), which saw revenue rise 55 percent in 2020 as a result of the outbreak. It was enough growth to drive Wayfair's bottom line into the black, which it had previously struggled to achieve.

 

Wayfair's business has stalled, with sales falling more than 10% in the second quarter of 2021. However, Wayfair has stayed profitable, and the trend of furniture sales going online should help the company thrive in the long run.

 

 

7. Target Corporation (TGT)

 

Target is Ohmes' top discount retail stock recommendation for the holiday shopping season, along with Walmart. Target, like Walmart, will maintain a relatively good inventory position, benefit from more favorable port access and long-term shipping agreements, and gain market share from smaller competitors battling with supply chain limitations in the fourth quarter, according to Ohmes. 

 

Target's margins should improve in the fourth quarter due to a transition to higher-margin in-store sales, according to Ohmes, and the business should experience less labor cost pressure going forward. TGT stock, which ended at $252.05 on Nov. 18, has a "buy" rating and a $317 price target from Bank of America.

 

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8. Starbucks Corporation (SBUX)

 

This holiday season, Bank of America's top stock recommendation in the restaurant retail area is Starbucks. Starbucks' resilience in recent years, according to analyst Sara Senatore, has been excellent, and the firm will likely see robust gift card demand in the fourth quarter. 

 

Furthermore, Starbucks has a history of providing cautious margin and earnings guidance, implying that the company's fiscal 2022 prediction of at least 10% earnings per share growth could be revised upward. 

 

Starbucks, according to Senatore, has pricing power that can help them offset rising costs. SBUX stock, which ended at $112.90 on Nov. 18, has a "buy" rating and a $135 price target from Bank of America.

 

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9. Lowe's Companies, Inc. (LOW)

 

Since the start of the health crisis in early 2020, home improvement has been a hot topic in the retail sector, and expert Elizabeth Suzuki expects that trend to continue in the fourth quarter. Lowe's has been rated one of Bank of America's top hard-line retail stock picks for the Christmas season. 

 

Suzuki claims that the company's size affords it more bargaining leverage with suppliers and transportation partners than smaller competitors. Furthermore, she claims that Lowe's will have better in-stock levels in its locations, which is important for professional customers. 

 

LOW stock, which ended at $247.32 on Nov. 18, has a "buy" rating and a $281 price target from Bank of America.

 

 

10. Best Buy Company, Inc. (BBY)

 

Suzuki points out that specialty stores like Best Buy, the world's largest retailer of consumer electronics, have faced inventory shortages in previous quarters, but have effectively rebuilt inventory levels ahead of the crucial holiday shopping season. 

 

Finest Buy has done one of the best jobs of improving inventory levels moving into the fourth quarter, according to Suzuki, who has labeled the stock a top buy in the specialty retail sector.

 

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Best Buy, according to Suzuki, is particularly well-positioned to benefit from a hybrid in-office and remote work environment in the long run. BBY stock, which ended at $135.59 on Nov. 18, has a "buy" rating and a $157 price target from Bank of America.

 

Bottom Line: Are retail stocks right for you?

 

It's always fun to invest in companies you know and love, and retail stocks often fit the bill. Focus on the retailers with the strongest business fundamentals -- low debt levels, healthy cash flows, and strong competitive positions -- to give yourself the best chance to make money for your investment portfolio.