Holiday Shopping Is Almost Here: 5 Large-Cap Winners to Buy Now

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Dollar Tree

This bargain retailer was hit hard back in February and could be offering a very compelling entry point. Dollar Tree Inc. (NASDAQ: DLTR) is one of the largest dollar store chains in the United States, with nearly $21 billion in revenues in 2017.

The company operates 14,482 stores in 48 U.S. states and five provinces in Canada under the Dollar Tree, Family Dollar and Dollar Tree Canada banners and stores carry an assortment of consumables, general merchandise and seasonal products.

Given the spike in purchasing from lower income consumers, this could be a huge positive Dollar Tree given the company’s big presence in the discount market.

The $105 Merrill Lynch price target compares with the $96.50 consensus figure. The stock closed Thursday at $81.55 a share.

Target

This company has had its share of issues, but it now resides on the Merrill Lynch US 1 list. Target Corp. (NYSE: TGT) is one of the largest discount retailers in the United States, operating roughly 1,800 Target stores across the country. The company sells merchandise in its Signature Categories Style, Baby, Kids and Wellness, as well as other products in both physical Target stores and online at Target.com.

Since 2017, Target has poured tons of money into its e-commerce offerings, overhauling its stores and refreshing its inventory to better compete against Amazon. Target has even embraced the same-day delivery concept. Most importantly, the company seems to have put some good distance between the headline issues that were public relations nightmares, and it continues to be a favorite destination of consumers. Plus, Target posted outstanding earnings for the most recent quarter on Wednesday morning.

Shareholders receive a stellar 2.98% dividend. Merrill Lynch has set its price objective at $100. The consensus target is $89.01, and the shares closed most recently at $85.97.

Walmart

The giant retailer is still on sale after trading sideways for much of this year. Walmart Inc. (NYSE: WMT) is the world’s largest retailer, operating retail stores under the formats of Walmart Stores, Supercenters, Neighborhood Markets, as well as Sam’s Club locations, in the United States, and it has a growing e-commerce business (including Jet.com). Internationally, Walmart also operates locations in several countries, including Argentina, Brazil, Canada, China, Japan, Mexico and the United Kingdom.

Each week, nearly 260 million customers and members visit the company’s 11,535 stores under 72 banners in 28 countries and e-commerce sites in 11 countries. With fiscal year 2017 revenue of nearly $486 billion, Walmart employs approximately 2.2 million associates worldwide.

The company announced in the summer plans to acquire a 77% stake in India e-commerce retailer Flipkart in a $16 billion debt and cash transaction. The deal dramatically expands Walmart’s presence in India, where online retail is growing quickly and Flipkart is a leader. The deal is expected to close in fiscal 2019 and could be dilutive for the foreseeable future.

Walmart shareholders are paid a 2.21% dividend. The Merrill Lynch price target is $115. The posted consensus target is $104.11, and the shares ended Thursday at $94.21.

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The key to all these top companies is they offer what most consumers are looking for: the lowest prices every day. In a very competitive world, they continue to be a formidable challenge for smaller companies and should once again dominate the holiday shopping season.