The market as a whole has been on pins and needles recently due to rising tension between the United States and China as well as concerns about unfavorable macroeconomic trends. Those uncertain conditions have made it tricky for investors to pick long-term stocks to buy. That’s especially true in the retail sector, where the trade war has cast a dim shadow over the majority of its players.
When looking at retail stocks, e-commerce juggernaut Amazon (NASDAQ:AMZN) tends to be at the top of retailers’ minds, however AMZN isn’t the only retail stock to buy.
There are plenty of others out there that traders should consider to round out their long-term portfolios.
Retail Stocks to Buy: Dollar General (DG)
It’s difficult to pick a retailer when you’re worried that a recession might be on the horizon, but a recession is a good reason to add a discount retailer like Dollar General (NYSE:DG). DG stock not only exposes you to the retail sector, but the firm adds a layer of insulation should an economic downturn strike. Because the company sells low-priced consumer staples, it won’t feel the effects of poor economic conditions as much as a premium-goods retailer.
There’s a lot to like about DG stock right now as well. The company has been growing its footprint aggressively and its strategy going forward looks promising. Existing stores are getting a makeover including refrigerator cases where fresh food and drinks will be displayed. The new store designs are predicted to raise comparable-store sales by at least 4% in the coming quarters.
Plus, DG’s partnership with FedEx (NYSE:FDX) is likely to bring in new customers who otherwise might not set foot in a DG location. Top that with redesigned stores offering cold drinks and snacks near an FDX drop-off location, and you have a recipe for rising sales.
Simon Property Group (SPG)
If you’re looking for juicy dividends to come along with your retail stocks, then real estate investment trusts are the way to go. A good option in that arena is Simon Property Group (NYSE:SPG). SPG stock is backed by a powerful portfolio of malls and shopping centers which at first glance might make you discount its value. Yes, shopping centers are going the way of the dodo — but that doesn’t make SPG a bad buy.
For one thing, SPG is one of the largest real estate owners of any kind in the U.S., which makes it a powerful player whether you’re nervous about the future of shopping malls or not. Simon Property Group’s extensive portfolio means the firm has a lot of money to help it redevelop its spaces. The firm is enhancing some of its locations with casinos, entertainment venues and even apartments and workspaces. SPG has also started converting some of its properties to esports arenas, which could become huge moneymakers for the firm as gaming continues to gain momentum.
Right now you can pick up SPG for just around $153 per share which means its dividend yield is 5.5%. Considering the firm’s most recent results showed record earnings and cash flow, that’s a pretty enticing bargain.
Canada Goose (GOOS)
A company like Canada Goose (NYSE:GOOS) might not be on your radar because of its size and visibility, but it should be. GOOS stock is a massively underrated retail equity that has the potential to deliver immensely over the winter months. The firm’s first-quarter earnings were solid with a 59% revenue increase, yet worries about trade tension with China and the state of the European economy kept GOOS stock from rising.
While Canada Goose is best known for its winter jackets, the firm has been working to build out a broader portfolio including light-weight spring jackets and raincoats. So far, the new products have been well received and the new range of non-parka apparel is expected to deliver sales growth of around 50% this year.
Still, the firm is down nearly 30% from its February highs largely thanks to industry-wide concerns. That’s good news for value investors who can snap up this quality retail pick at a bargain price.
Stitch Fix (SFIX)
I have to admit that recommending Stitch Fix (NASDAQ:SFIX) pains me a little bit, because I’m not 100% behind the firm’s business model. To me, a box of clothing that I didn’t choose and now have to send back holds very little appeal, but the best investors keep their emotions out of it — and that’s what I’m doing with SFIX stock. Regardless of my personal preferences, SFIX has found a market for its subscription boxes and that has created some powerful growth opportunities.
SFIX is working to capture the kids clothing market with new Stitch Fix Kids boxes, which might appeal to busy parents who don’t have the time to do their childrens’ back-to-school shopping. Plus, Stitch Fix has opened its doors in the United Kingdom where online shopping is even more popular than it is in the U.S. Success there would be a huge catalyst for SFIX stock in the coming quarters.
Despite all of the positive catalysts that SFIX may have on the horizon, the stock lost nearly 30% in August as investors worried about the segment as a whole and Amazon’s entry into the personal styling space. The stock is nearly 60% lower than where it was a year ago, making now a great time to take a position.