With summer coming to an end and back to school season full in swing, Americans will start to prep for the upcoming holiday season by frequenting malls, shopping centers, and online stores. Because of this, it is the perfect time to invest in retail stocks, from Target to Chinese retailer Alibaba Group to Home Depot.
Since the rise of online retailers like Amazon, other merchandise companies have been hit hard. However, Target is among one of the big retailers that have stood its ground. Target has captured consumers with new initiatives such as cutting prices, adding private labeled brands, remodeling stores, and opening more stores in urban areas.
Their hard work has paid off for both the company itself and investors. Target released their second-quarter revenue, reporting a total of $17.8 billion, which is a 6.9% year over year. Target shares have increased to over 60% and have increased its quarterly dividend by 3.2% to $0.64 per share
Alibaba is China’s leading e-commerce infrastructure operator. Over the past four years, Alibaba’s sales and cash flows have been accelerating at promising rates. In the past four years, cash flow has risen an annual average of 55% and revenue rising 48% each year.
In recent news, the stock price has experienced a 4% price drop over the past and 10% decline, making it an opportune time to invest.
Over the past decade, Home Depot’s shares have soared over 600%. Instead of opening new stores, the company has invested in e-commerce, improving its stores and share buybacks. By implementing this strategy, sales have jumped to 8% in the recent quarter.
Home Depot’s success is tied to the demand for home renovations. In recent years, millennials have been spending more money on remodeling old homes and opting for Home Depot instead of online retailers to avoid outrageous shipping fees on heavy goods like lumber.
Shareholders have felt the benefit of Home Depot’s success. Since 2011, Home Depot has raised its dividend every year due to the 16% quarterly payout. As consumers continue to spend and the housing market continues to grow strong, Home Depot is an advantageous investment for shareholders.