Retail

Holiday Shopping Season Has Begun: 5 Large-Cap Retail Winners to Buy Now

Dollar Tree

This bargain retailer was hit hard back in August and could be offering a very compelling entry point. Dollar Tree Inc. (NASDAQ: DLTR) operates discount variety retail stores. With the spike in purchasing from lower-income consumers, this could be a huge positive for Dollar Tree, given the company’s big presence in the discount market.

Its Dollar Tree segment offers merchandise at the fixed price of $1.00. These stores provide consumable merchandise, including candy and food, and health and beauty care, as well as everyday consumables, such as household paper and chemicals, and frozen and refrigerated food. The offer variety merchandise such as toys, durable housewares, gifts, stationery, party goods, greeting cards, softlines and other items, as well as seasonal goods that include holiday merchandise.

The Family Dollar segment operates general merchandise discount retail stores that offer consumable merchandise, including food and beverages, tobacco, health and beauty aids, household chemicals, paper products, hardware and automotive supplies, diapers, batteries, and pet food and supplies. Its home products include housewares, home decor and giftware, as well as domestics, such as comforters, sheets and towels.

Family Dollar stores also provide apparel and accessories merchandise, seasonal and electronics merchandise, as well as personal electronics such as prepaid cellular phones and services. This segment operates 7,783 stores under the Family Dollar brand and 11 distribution centers.

The $115 BofA Securities price target is well above the $108.17 consensus target. Dollar Tree stock ended Tuesday’s trading at $88.68 a share.

Target

This remains a solid and safe retail total return play, and it is a member of the BofA Securities US 1 stock 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.

While the company has shot itself in the proverbial foot more than once over the past five years, for a variety of reasons, it remains a prime destination for shoppers and should be poised for a big holiday season. In addition, for over three years, Target has poured tons of money into its e-commerce offerings, overhauling its stores and refreshing its inventory to compete better against Amazon.

Shareholders receive a 1.72% dividend. The BofA Securities has set a sizable $175 price objective. The consensus target is $160.25, and Target stock closed most recently at $158.31

Walmart

Shares of this giant retailer have rallied nicely off levels posted in March but are only flat for 2020. Walmart Inc. (NYSE: WMT) is the world’s largest retailer, operating retail stores under the formats of Walmart Stores, Supercenters, Neighborhood Markets and Sam’s Club locations in the United States, as well as a growing e-commerce business. 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 websites in 11 countries. With fiscal year 2019 revenue of $514.4 billion, Walmart employs approximately 2.2 million associates worldwide.

Shareholders receive a 1.54% dividend. The BofA Securities price target is $175. The consensus target is $147.70, and Walmart stock was last seen trading at $140.63.


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

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